By David Shepardson
WASHINGTON (Reuters) – Southwest Airlines (NYSE:) CEO Bob Jordan said on Wednesday he will not resign as the airline is under pressure from activist investor Elliott Investment Management, which has already made changes to its open-seat policy and other possible changes considering.
“We want to understand what their ideas are, they can have great ideas,” Jordan told reporters in Washington after an event. “Ultimately, 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’ll execute on it.”
Elliott on Monday called for leadership and board changes at Southwest after reporting a stake of about $1.9 billion in the US airline. He said the company needs new perspectives to compete in the modern aviation industry.
“I have no plans to resign,” said Jordan, a 36-year veteran of Southwest.
Jordan also said that Southwest, which had expected to get 80 planes from Boeing (NYSE:) this year, now expects only 20 and does not expect to use the smaller MAX 7 – which is still awaiting certification – until 2026.
“We support Boeing as it works to get better… Because a better Boeing is good for us for decades. We need Boeing to be rock solid,” Jordan said. “I’m not happy with the delays.”
Jordan will meet with the head of the Federal Aviation Administration later on Wednesday to discuss Boeing. He visited Boeing supplier Spirit AeroSystems (NYSE:) on Friday where many quality issues have arisen and plans to visit Boeing again in two weeks.
Jordan said the Elliott plan is “fairly light” in terms of proposed changes. He added that he had heard Elliott could propose baggage fees, but Southwest said customer data shows nearly 50% of customers choose the airline because of its no-baggage fee policy.
“You need to be well informed before proposing changes that will impact Southwest Airlines’ business model,” Jordan said. “Elliott does not run the company.”
Jordan told reporters that the airline would not stagnate and reiterated that Southwest is considering changes to its open seating policy and possibly adding premium seats or seats with extra legroom.
“If customer preference tells us we need to evolve, we will evolve. You can’t be stubborn about change,” Jordan said.
“At the same time, we continue to stand by our values and our values say, ‘We treat people well. We have the best policies, we have the best people, we operate well” – beyond that, everything could be at stake. table.”
Southwest plans to unveil a “very broad plan” at an investor day in September, Jordan said.
