On July 25, 2024, a Southwest Airlines plane took off from Hollywood Burbank Airport and another Southwest Airlines plane taxied in Burbank, California.
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Southwest Airlines On Thursday, the company raised its third-quarter revenue forecast, announced its board authorized $2.5 billion in stock buybacks and detailed a series of changes to its business model to fend off activist Elliott Investment Management. Elliott Investment Management).
The airline said it expected third-quarter unit revenue to rise 3% from a year earlier, up from its previous forecast of a 2% decline.
The airline also said it would add Bob Fornaro, a well-respected industry veteran who led spirit airlinessubmitted to its board of directors. The history of Southwest Airlines and Fornaro dates back more than a decade. He served as CEO of AirTran, which Southwest Airlines merged with in 2011, and served as an advisor to Southwest Airlines after the merger.
Southwest Airlines executives laid out their vision for the company’s future during an investor day presentation Thursday at the airline’s Dallas headquarters. Chief Executive Bob Jordan and other senior Southwest leaders are facing increasing pressure from Elliott, who has called for leadership changes at the airline.
Southwest executives will try to convince investors that the airline is on the right track to boost profits and grow revenue. This summer, the company made dramatic changes to its more than half-century-old business model, including assigned seats and seats with extra legroom that could generate more revenue for the airline.
In a presentation Thursday, Southwest Airlines stood by its long-standing policy of allowing customers to check two bags for free, saying the “market share gains outweigh the potential revenue loss from baggage fees.”
A day earlier, Southwest Airlines told employees it would cut service in Atlanta next year and could lay off more than 300 flight attendants and pilots from the city to reduce costs.
Earlier this month, Southwest Airlines Executive Chairman and former CEO Gary Kelly said he would resign by the end of next year. Elliott later told the Southwest Machinists Union that they still wanted leadership changes at the top of the airline. The company had no immediate comment on the strategy presentation it released Thursday.
—CNBC Rohan Goswami contributed to this report.
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