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Southwest Airlines has been navigating a challenging economic environment yet outperforming other carriers in recent months. Following an operational disruption in 2022 and continued struggles against competitors, the airline faced additional pressure last year when Elliott Global Management, an activist investment fund with a 10% stake in Southwest, demanded changes in management.
Despite these challenges, Southwest's recent performance has surprised investors. The airline has seen less stock decline compared to competitors, with only a 15% drop in value since February. In contrast, other airlines have experienced steeper declines, including a 40% drop in some low-cost carriers' share prices.
A crucial factor in Southwest's resilience is the significant changes in leadership and management influenced by Elliott Management. The airline welcomed five new board members approved by Elliott, including Rakesh Gangwal as the new chairman, shifting focus from customer-centric practices to financial results-oriented strategies.
