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Southwest Airlines increased its revenue forecast for the third quarter, authorized $2.5 billion in share buybacks, and implemented various changes to its business model in response to activist Elliott Investment Management. The airline now anticipates a potential 3% rise in unit revenue for the third quarter, up from a previous expectation of a 2% decline. Additionally, Southwest appointed industry veteran Bob Fornaro to its board of directors. Fornaro, who previously led Spirit Airlines, has a longstanding history with Southwest, having served as CEO of AirTran before its merger with Southwest in 2011.
Southwest executives held an investor day presentation at their Dallas headquarters, where they presented their vision for the company’s future. The leadership team, led by CEO Bob Jordan, faces mounting pressure from Elliott for changes within the carrier. Despite this, Southwest remains committed to its recent business model adjustments, such as introducing assigned and extra-legroom seats to boost revenue. The airline also reaffirmed its policy of allowing customers to check two bags for free, citing the competitive advantage it provides in gaining market share.
In a cost-cutting measure, Southwest announced plans to reduce service in Atlanta next year, potentially affecting over 300 flight attendants and pilots in the region. Former CEO Gary Kelly disclosed his intention to step down by the end of the following year, prompting further calls from Elliott for leadership changes at the airline. The firm’s response to Southwest’s strategy presentation remains undisclosed at this time.
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Emily Jensen, graduated from the London School of Economics and Political Science (LSE) in the UK in 2015 with a degree in Economics. She specializes in financial markets and international trade. After graduating, she worked as an analyst at an investment bank in London, where she developed expertise in global economic trends. She later transitioned into consulting, focusing on fintech ventures and providing insights into global economic developments. Emily is passionate about the intersection of finance and technology and aims to drive innovation in the financial sector.