SCHEDULE: Elliott Management Boosts Southwest Airlines Stake

Elliott Investment Management L.P. has increased its economic exposure in Southwest Airlines Co. to approximately 14.8% of outstanding shares, citing belief in the airline's strategic initiatives.

Summary

• Elliott Investment Management L.P. (EIM) filed Amendment No. 9 to its Schedule 13D regarding Southwest Airlines Co.
• EIM beneficially owns 51,128,500 shares of Southwest Airlines common stock, representing 9.7% of the 525,187,709 shares outstanding as of July 23, 2025.
• The aggregate cost of directly held shares by Elliott Funds is approximately $1,343,906,499.
• EIM also holds cash-settled derivative agreements (swaps) referencing 26,543,000 shares, representing an additional 5.1% economic exposure.
• EIM's combined economic exposure in Southwest Airlines is approximately 14.8% of the outstanding shares.
• EIM increased its exposure based on its belief that Southwest's strategic initiatives can create long-term shareholder value.
• Recent open market transactions include purchases of 1,650,000 shares on June 27, 2025, at a weighted average price of $32.19, and 1,200,000 shares on June 30, 2025, at a weighted average price of $32.25, alongside sales of 2,850,000 shares on July 1, 2025, at a weighted average price of $33.33.

Sentiment

Score: 7

Explanation: The filing indicates a significant activist investor taking a large stake, expressing confidence in the company's strategic initiatives to create long-term shareholder value. This is generally viewed positively as it can lead to value-enhancing changes, though the specific impact remains to be seen.

Positives

• Elliott Management's increased exposure signals confidence in Southwest Airlines' strategic initiatives.
• The activist investor believes these initiatives can create long-term shareholder value.
• Elliott Management's significant stake (9.7% beneficial ownership, 14.8% combined economic exposure) could drive corporate governance changes or strategic improvements.

Future Outlook

Elliott Investment Management L.P. believes that Southwest Airlines Co.'s strategic initiatives can position the Issuer to create long-term shareholder value.

Industry Context

This filing indicates a significant activist investor stake in a major U.S. airline, suggesting potential pressure for strategic changes or operational improvements within the highly competitive and often volatile airline industry. Such investments often precede calls for enhanced efficiency, capital allocation adjustments, or board representation, which could influence broader industry dynamics.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if Elliott Management's strategic initiatives are adopted and successful. Increased scrutiny on management performance.
• Management/Board: Likely increased pressure from Elliott Management to implement specific strategic changes or improve performance.
• Employees/Customers/Suppliers/Creditors: No direct impact mentioned in this filing, but any future strategic shifts driven by Elliott could indirectly affect these groups (e.g., operational changes, cost efficiencies).

Next Steps

• The filing does not explicitly state future actions or milestones for Southwest Airlines. However, Elliott Management's increased stake often implies future engagement with the company's management or board to advocate for strategic changes.

Key Dates

Recommendation

Elliott Management's increased stake and stated belief in Southwest Airlines' strategic initiatives suggest potential for future value creation. However, the specific actions Elliott will pursue and their ultimate success are uncertain. While the activist involvement could be a catalyst, it's prudent to hold and observe the developments rather than immediately buy or sell based solely on this filing, as the impact of activist campaigns can vary.

Keywords

Southwest Airlines, Elliott Investment Management, LUV, Airline Industry, Activist Investor, Schedule 13D, Shareholder Value, Common Stock, Beneficial Ownership, Derivative Agreements, Swaps