Activist Investor Elliott Criticizes Southwest Again After Airline Announces Changes

The friction between Elliott Investment Management and the leadership of Southwest Airlines (LUV) intensified after the private equity firm blasted the airline’s management for acting too late to initiate financial reforms.

On Thursday, Southwest announced a series of steps to boost revenue, including ending its long-held practice of open seating and offering premium seating. It also plans to begin operating on a 24-hour schedule with overnight flights.

In a statement on behalf of Partner John Pike and Portfolio Manager Bobby Xu, Elliott said that the moves come “more than a decade late, and after a 50% decline in its share price over the past three years.” It added that the actions were made by “the same leadership team that has presided over a series of failed measures to improve performance, repeated operational missteps and poor financial results.”

Elliott went on to say that management was “simply not doing its job” by failing to recognize that the desires of most of its customers were being unmet. The firm said it looks forward “to offering our fellow shareholders an opportunity to elect a Board of industry leaders that can return Southwest to best-in-class performance.”

The statement followed similar comments made by Elliott in June when it reported that it had taken a $1.9 billion stake in the carrier and pushed for a management shakeup.

Southwest shares fell 3.1% to close at $27.23 on Friday, bucking a broader rally for the U.S. stock market.