Southwest Airlines Chief Executive Bob Jordan said Wednesday he has no plans to resign despite facing pressure from activist investor Elliott Investment Management.
“We want to understand their ideas. They may have great ideas,” Jordan told reporters after the event in Washington. “At the end of the day, we’re going to treat Elliott like any other investor. We’re going to sit down and listen to them. Southwest is a great company. We have a great plan, and we’re going to execute on it.”
After reporting on Monday that he owns about $1.9 billion worth of Southwest Airlines stock, Elliott called for changes to the airline’s management and board, saying the airline needs a fresh perspective to compete in the modern airline industry.
“I have no plans to resign,” said Jordan, who worked for Southwest for 36 years.
Jordan also said Southwest Airlines, which was due to receive 80 planes from Boeing this year, is now set to receive just 20, with the smaller MAX 7s, which are still awaiting certification, not due to enter service until 2026.
“We support Boeing in trying to improve because having Boeing do better is going to benefit us for decades to come. We need Boeing to be very solid,” Jordan said. “We’re not happy with the delays.”
Jordan is scheduled to meet with the head of the Federal Aviation Administration later Wednesday to discuss Boeing.
He visited Boeing supplier Spirit AeroSystems on Friday, which has experienced a number of quality issues, and plans to visit Boeing again in two weeks.
Jordan said Elliott’s plan is “fairly minimal” in its proposed changes.
He added that he had heard Elliott might propose baggage fees, but Southwest said its customer data showed about 50 percent of its customers choose the airline because of its free baggage policy.
“We must be fully informed before proposing any changes that would impact Southwest’s business model,” Jordan said. “Elliott is not in charge of the company.”
Jordan reiterated to reporters that Southwest has no plans to stagnate and is considering changing its open-seating policy and adding premium seats and seats with extra legroom.
“If customer preferences are telling us we need to evolve, then we will evolve. We can’t be stubborn about change,” Jordan said.
“At the same time, we stick to our values. Our values say, ‘We treat people well. We have the best policies, we have the best people and we run it well.’ Anything can happen outside of that.”
Jordan said Southwest plans to announce “very extensive plans” at its investor meeting in September.
