SCHEDULE: Elliott Trims Southwest Airlines Direct Stake

Elliott Investment Management reduced its direct beneficial ownership in Southwest Airlines to 9.9% while maintaining a 13.1% combined economic exposure, citing portfolio management and confidence in strategic initiatives.

Summary

• Elliott Investment Management L.P. (the "Reporting Person") filed Amendment No. 11 to its Schedule 13D regarding Southwest Airlines Co.
• The Reporting Person reduced the direct economic exposure of its funds for portfolio management purposes.
• Elliott Funds now beneficially own 51,128,500 shares of Common Stock, representing 9.9% of the outstanding shares.
• The aggregate cost of directly held shares is approximately $1,373,191,701.
• Elliott also holds cash-settled derivative agreements representing economic exposure to an additional 16,365,000 shares (3.2%).
• The combined economic exposure in Southwest Airlines is approximately 13.1% of outstanding shares.
• Elliott intends to remain a significant shareholder, expressing confidence in Southwest's strategic initiatives to drive profitability, capital allocation, and shareholder value.
• Transactions in the past 60 days include the sale of 1,000,000 shares on 12/12/2025 at a weighted average price of $41.29 and 1,100,000 shares on 12/15/2025 at a weighted average price of $41.19.

Sentiment

Score: 7

Explanation: While Elliott reduced its direct stake, it maintains a substantial combined economic exposure and explicitly states confidence in Southwest's strategic direction and future profitability. The reduction is framed as portfolio management, not a loss of faith, indicating a moderately positive long-term outlook from a key activist investor.

Positives

• Elliott Investment Management L.P. intends to remain a significant shareholder, indicating continued long-term interest.
• Elliott expresses confidence that Southwest Airlines' ongoing strategic initiatives will lead to greater profitability, accretive capital-allocation opportunities, and shareholder value creation.

Negatives

• Elliott Investment Management L.P. reduced its direct beneficial ownership by selling 2,100,000 shares in December 2025.
• The reduction in direct holdings, even if for "portfolio management," could be interpreted as a slight decrease in conviction or a rebalancing of risk.

Future Outlook

Elliott Investment Management L.P. intends for its funds to remain significant shareholders of Southwest Airlines, based on its confidence that the Issuer's execution of ongoing strategic initiatives will translate to greater profitability, accretive capital-allocation opportunities, and shareholder value creation.

Industry Context

This filing reflects an activist investor's ongoing position and rebalancing within the airline sector. Elliott's continued confidence in Southwest's strategic initiatives suggests a belief in the company's ability to navigate industry challenges and capitalize on opportunities, potentially through operational improvements or market share gains, which is a common theme for airlines post-pandemic.

Stakeholder Impact

• Shareholders: The reduction in direct holdings by a prominent activist investor might cause short-term concern, but Elliott's stated confidence in Southwest's strategic initiatives could reassure long-term investors. The continued significant economic exposure (13.1%) suggests ongoing oversight and potential for continued advocacy for shareholder value.

Key Dates

Recommendation

Elliott's reduction in direct beneficial ownership, while framed as portfolio management, introduces a slight cautionary note. However, their continued significant economic exposure and explicit confidence in Southwest's strategic initiatives suggest that the core investment thesis remains valid. Investors should hold, monitoring Southwest's execution of its strategic plans and Elliott's future actions, as the activist presence could still drive value.

Keywords

Southwest Airlines, Elliott Investment Management, Schedule 13D, Beneficial Ownership, Shareholder Activism, Airline Industry, Equity Stake, Portfolio Management, Common Stock, Derivative Agreements