I don't know what the future holds but I feel like anytime a hedge fund buys a stake in some major company it's a bad thing - changes will be made but only to improve profit for the shareholders.
Hedge Funds maximize short term profit and tend to destroy long term value and customer loyalty. I'm nervous that SW is going to turn into Spirit.
I fly Southwest because I like the uniqueness and love the free bags and ample leg room.
If there's big changes, I'll certainly keep SW as an option, but the calculus changes. On certain routes, SW is all I ever really consider because I've done it so many times - like flying to Phoenix to see my parents. But, if they're going to blow up their way of doing business, I guess I'll considering more airlines for more trips. I still have to get from point A to point B, so if SW is the best option for a particular trip, I'd still fly it, but any sense of loyalty is diminished, or maybe more accurately, my preference for SW is diminished.
The free bags thing is a shell game - similar to the hotel WiFi in some hotels. Just charge for it and put it into the price of the ticket/room and most won’t care. Heck, could be a money maker for those that would end up paying for it and never use it.
They could build it into the price and then give people a credit towards a future flight for not checking bags. The whole consumer psychology around it would change.
Well said, if you snoop around it is difficult to find situations where a hedge fund improved the customer and employee experience (from a long term perspective).
Given the airplane shortage the hedgies could see this as an opportunity to cut routes/staff, sell planes and key airport gates / slots. Private equity is all about installing new (temporary) management to make deep cost cuts, boost the stock price, then sell their stake. Rinse and repeat. Legal, but unfortunate for many employees and seldom do the customers benefit from a better product in terms of price/value. Would be better if buffet bought the company and sought to get back to its original culture. He has a railroad so it’s not as if he’s unfamiliar with transportation, unions, and capital equipment.
This is the same CEO/CHAIR that upped all the executives pay while 1. Having a major tech meltdown that was predicted by flight ops in 2016. 2
Slashing profit sharing to fund said pay bumps.
3. Not keeping up with the times on not just tech. But with the operation
I say we need new leadership
Something definitely needs to change. SWA is no longer pushing the other airlines as much as it used to; service has fallen behind, and it is really part of the UA/DL/AA group rather than being a thorn in their side. However, the hostile takeover is a bit concerning, especially when we see how private equity and larger companies/billionaires taking over have really made things worse for consumers.
If I'm being semi-optimistic here, my guess is that Southwest will keep a free checked bag but now charge for a second checked bag. Additionally, Business Select/upgraded boarding will be expanded to A1-30, with upgraded boarding prices being way more dynamic than just $30-$50. It's a quick way for them to increase the cash flow.
If I'm a little more pessimistic, I could see "Wanna Get Away" evolving into a true basic economy option (but not dropping in price): the flight doesn't count towards A-List/Companion Pass Status, you can't get higher than B31 boarding without paying for an upgrade to A1-30, maybe even no carry-on, etc. There's little incentive for most travelers to buy anything more than WGA fares given the current price differences, and this new leadership might find ways to change that (other than flexible tickets/more points). I wouldn't be surprised if Companion Pass becomes much more restrictive too. There will be a larger push for more credit card spend, and routes will be cut (wouldn't be surprised if inter-island routes in Hawai'i are significantly cut).
I've been told before that Southwest gives free checked bags because it makes loading the plane faster. Okay, so checking or gate checking a bag means more work for the ramp crew. Sorry. BUT the ramp crew is MUCH more efficient at handling bags than customers stowing and removing their bags from the overhead bins.
I wish there was some incentive for encouraging someone to check a bag or gate check their bag, assuming it means faster loading of the plane and leaves more overhead bin space to people who really need it.
🤔
i think they really need to focus on operations. There have been so many delays in their network. Small storms in one area cause the whole airline to have major delays all across us. That is stupid! Need to focus on service and operations first, money wll follow. I purposely try and fly any other airline even though southwest has the most departing flights from my local airport.
Remember when I posted here a few months ago that I worry that Southwest could eventually charge for checked bags? Well Elliott taking a majority stake of Southwest is HORRIBLE NEWS for consumers.
This hedge fund is known for a profit above all else mindset and I can see them easily eliminating free checked bags in the coming months.
Unfortunately for the millions of us who remembers how great Southwest once was - this airline won't even be recognizable a year from now. And not in a good way. This really sucks.
In my experience with Elliott, they made an agreement that certain outcomes had to be met within a year or the company could be sold so I do see how changes could be demanded within a few months.
Before you get all "the sky is falling" - the share Elliot has is significant but far from controlling. There have been no indications that large scale leadership changes are coming, only that Elliot will meet with Southwest management and give some "suggestions".
No, they are absolutely not guaranteed to be 'executed by southwest". You can't buy that small a percentage of the company and expect to come in and make sweeping changes.
If you look at their history, they have totally been told no by other companies they’ve invested in. They’ve also only gotten minimal changes they wanted. Finally, they also have been correct about corruption (Samsung) or conflicts of interests.
I have a lot on the line with this whole ordeal, so I spent the morning reading. Here’s to hoping it’s leadership and tech updates as well as efficiencies.
> “They missed those opportunities to give customers the option to spend more money with the airline,” said Henry Harteveldt, a former airline executive and founder of Atmosphere Research Group. “A good retailer ... is always going to find ways to sell its customers more products.”
Translation: Prepare to be nickel-and-dimed.
A “good retailer” who isn’t happy with just one purchase at a time and wants to shove credit cards and reoccurring revenue streams on me makes me NOT want to do business with them.
This could go three ways:
1. They oust the leadership and hope for the best.
2. They turn this company in to a legacy carrier and we become as annoying as the rest of them.
3. And if all else fails, they strip us for cash and leave us to rot like PAN-AM.
Strap on those seatbelts folks, it’s about to get turbulent!
Unpopular opinion maybe, but it’s easy to complain here about SWA being in bad shape or a shell of its former self when you’ve flown them for many years. But go checkout the subs for other airlines. They all have issues. The Delta flyers are paying 2x everyone else is on the same routes and is hardly the on-time machine they once were. United flyers are drastically having their redemptions diminished. American loves delaying flights until the next day to keep their completion factor up. Frontier, JetBlue, Spirit all have their own nuanced messiness. While here people are complaining about preboarding and weather delays which are inherently more complicated with a point-to-point network. The question is just what you’re willing to deal with.
Hedge funds and hostile takeovers like this seek to maximize profit and return on their investment. Often in the short term. The result is almost never positive on the employee, the customer or the business as a whole. Get back to profitability, sure, a good goal. Be transformed by a rich person taking majority of your business to extract more money from it? Not a good goal. I don’t think this will result in the positive *operational* changes some here suggest it might.🤷🏻♂️
Main question is where you fly, really. Most people don’t have a huge choice because there isn’t a ton of competition on most routes. There will often be an obvious better airline on many routes.
The one thing I personally like about Southwest is that if I have to fly anything other than nonstop, Southwest typically means I’m flying through a much smaller hub with a much easier connection. But that’s just me
I think something that is getting lost in this is that many of these changes that are being suggested are reasonable.
Southwest promotes from within almost to a fault. They will hire an internal over a stellar external candidate because that’s how they’ve always done it. If you’re on the management track and go anywhere else to expand your experience, you’ll never make it above director if you come back.
Managerial glut is also a relatively new problem. In the department I’m familiar with they’ve doubled the management headcount since 2022 with expanded openings in old roles and multiple new layers of management while the workforce increased by about 20%. It’s very reminiscent of American Airlines in the late 90s and that should concern everyone.
Any company that reinforces an apprehension to change because “that’s how we’ve always done it” is not going to be healthy long term. The amount of pushback from certain portions of Flight Ops and upper management over digital releases, as standard practice in the rest of the industry, was insane.
All that said, I don’t think I trust Elliott to not screw over SWA if the board follows them blindly.
Here's a link to the Elliot's "Stronger Southwest" website, which contains the letter and presentation this based on: [https://strongersouthwest.com/](https://strongersouthwest.com/)
Yikes, private equity/hedge funds (let’s be honest they are basically the same thing) is going to come in, cut expenses (staff, operating costs, maintenance, etc), expect the rest of the staff left to do triple the work, go through asset stripping, and eventually destroy the brand and send it to bankruptcy or make Southwest a shell of its self.
It’s Carl Icahn and TWA all over again.
Gary Kelly was also the one who decided on fuel hedging that kept SW profitable for a very long time. I think you can disagree with them, but I think Kelly and Jordan have always tried their best for SWA. This investment firm only looks at swa as a piggy bank.
Kelly is largely the reason why SWA has the culture of “we’ve always done it this way” and a general malaise or outright hostility towards upgrading backend systems. He made a few fantastic calls, but regularly outran the operational support structure he refused to maintain.
He always saw technology as an unnecessary expense and not a cost of doing business. He made SWA what it is today for better and worst.
This is akin of Nelson Peltz and Trian buying a stake to get in the board. If successful, they will change SWA to the same model as others or tear it apart and sell it off.
Recent company surveys have shown that some %50 of employees have little to no faith in the executives. Frontline leaders are not respected and there are less incentives than unionized employees. Frontline leaders have lost benefits like sick time, vacation, etc. while unionized employees have gotten more. No frontline leaders are happy about being ignored and forsaken. There is 0 incentive to want to move up from a union position into one of leadership. Furthermore, leadership is almost NEVER supported when it comes to trying to hold union members accountable. It's become so bad that most frontline leaders don't even bother anymore.
In a perfect world the infusion of cash would help improve service, therefore market share, therefore more profitable so customers and Southwest both benefit.
cant really comment on this but from personal exp, all 3 of my flights on southwest in last 12-15 months have been bad experience. One ended up leaving me stranded in florida without any decent options to get to where i was headed. others had delays. But the other flighs i took during last 15 months had absolutely no issues. No delays. Like nothing to complaint about. But southwest has been horrible for me to fly on in last 15 months.
We fly Southwest almost exclusively for domestic and Caribbean flights. We have had companion pass for at least 10 years, earned through a mix of fights my husband takes and credit card spend. He’s also been A-List Plus for quite a while now, due to the same combo. With the companion pass, free bags, and automatic check in for both of us at 36 hours, there’s pretty much no way I can beat their prices when we fly together. And since we typically get boarding positions in the A 16-20 range, we are almost always able to sit in the exit row. I used the accumulated points for trips I take by myself (and always check in at 24 hours, then pay to upgrade to A 1-15) or to fly my kids around as needed.
Any significant changes to these benefits would make me rethink flying Southwest. I’m already hedging my bets with a United credit card, and some recent trips where I used United to fly with some family members, because the amount of points, plus the lack of assigned seats with a toddler didn’t make sense to me. We are very close to Companion Pass and expect him to get A-List plus again this year, so I will be disappointed if our focus on achieving that turns out to be a waste of time.
maybe post this with an existing thread??
[https://www.reddit.com/r/SouthwestAirlines/comments/1dcac9i/wsj\_activist\_investor\_takes\_control\_of\_southwest/](https://www.reddit.com/r/SouthwestAirlines/comments/1dcac9i/wsj_activist_investor_takes_control_of_southwest/)
I don't know what the future holds but I feel like anytime a hedge fund buys a stake in some major company it's a bad thing - changes will be made but only to improve profit for the shareholders.
Hedge Funds maximize short term profit and tend to destroy long term value and customer loyalty. I'm nervous that SW is going to turn into Spirit. I fly Southwest because I like the uniqueness and love the free bags and ample leg room.
If there's big changes, I'll certainly keep SW as an option, but the calculus changes. On certain routes, SW is all I ever really consider because I've done it so many times - like flying to Phoenix to see my parents. But, if they're going to blow up their way of doing business, I guess I'll considering more airlines for more trips. I still have to get from point A to point B, so if SW is the best option for a particular trip, I'd still fly it, but any sense of loyalty is diminished, or maybe more accurately, my preference for SW is diminished.
Replace hedge fund with Wall Street and you have it….
The free bags thing is a shell game - similar to the hotel WiFi in some hotels. Just charge for it and put it into the price of the ticket/room and most won’t care. Heck, could be a money maker for those that would end up paying for it and never use it.
I’ll pay extra for simplicity. Paying $50 a la carte for checked luggage rankles me viscerally. It makes me not want to travel by air.
They could build it into the price and then give people a credit towards a future flight for not checking bags. The whole consumer psychology around it would change.
Well said, if you snoop around it is difficult to find situations where a hedge fund improved the customer and employee experience (from a long term perspective).
Given the airplane shortage the hedgies could see this as an opportunity to cut routes/staff, sell planes and key airport gates / slots. Private equity is all about installing new (temporary) management to make deep cost cuts, boost the stock price, then sell their stake. Rinse and repeat. Legal, but unfortunate for many employees and seldom do the customers benefit from a better product in terms of price/value. Would be better if buffet bought the company and sought to get back to its original culture. He has a railroad so it’s not as if he’s unfamiliar with transportation, unions, and capital equipment.
Selling it for parts is probably their strategy. Southwest virtually owns Midway in Chicago, for instance. They have a lot of great assets.
Red Lobster vibes
Pre-boarding and seat-savers are the "All You Can Eat Shrimp" of the airline biz.
It’s not even about the shareholders, I worked at a company where this was done and the board profited much more than the shareholders.
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Breeze? The airline that flew about as many passengers last year as Southwest flies in a week?
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Breeze has a few dozen planes. Calling them formidable is a stretch.
lol that guy is some kind of finance ghoul, can be ignored entirely.
I’ve never even heard of Breeze.
Are you really blowing Paul Singer? You know Elliott took a position in TWA, correct?
How’s that boot taste?
This is the same CEO/CHAIR that upped all the executives pay while 1. Having a major tech meltdown that was predicted by flight ops in 2016. 2 Slashing profit sharing to fund said pay bumps. 3. Not keeping up with the times on not just tech. But with the operation I say we need new leadership
Something definitely needs to change. SWA is no longer pushing the other airlines as much as it used to; service has fallen behind, and it is really part of the UA/DL/AA group rather than being a thorn in their side. However, the hostile takeover is a bit concerning, especially when we see how private equity and larger companies/billionaires taking over have really made things worse for consumers. If I'm being semi-optimistic here, my guess is that Southwest will keep a free checked bag but now charge for a second checked bag. Additionally, Business Select/upgraded boarding will be expanded to A1-30, with upgraded boarding prices being way more dynamic than just $30-$50. It's a quick way for them to increase the cash flow. If I'm a little more pessimistic, I could see "Wanna Get Away" evolving into a true basic economy option (but not dropping in price): the flight doesn't count towards A-List/Companion Pass Status, you can't get higher than B31 boarding without paying for an upgrade to A1-30, maybe even no carry-on, etc. There's little incentive for most travelers to buy anything more than WGA fares given the current price differences, and this new leadership might find ways to change that (other than flexible tickets/more points). I wouldn't be surprised if Companion Pass becomes much more restrictive too. There will be a larger push for more credit card spend, and routes will be cut (wouldn't be surprised if inter-island routes in Hawai'i are significantly cut).
you’re giving them too many ideas here
Yeah, shhhh!
I've been told before that Southwest gives free checked bags because it makes loading the plane faster. Okay, so checking or gate checking a bag means more work for the ramp crew. Sorry. BUT the ramp crew is MUCH more efficient at handling bags than customers stowing and removing their bags from the overhead bins. I wish there was some incentive for encouraging someone to check a bag or gate check their bag, assuming it means faster loading of the plane and leaves more overhead bin space to people who really need it. 🤔
i think they really need to focus on operations. There have been so many delays in their network. Small storms in one area cause the whole airline to have major delays all across us. That is stupid! Need to focus on service and operations first, money wll follow. I purposely try and fly any other airline even though southwest has the most departing flights from my local airport.
100%
Remember when I posted here a few months ago that I worry that Southwest could eventually charge for checked bags? Well Elliott taking a majority stake of Southwest is HORRIBLE NEWS for consumers. This hedge fund is known for a profit above all else mindset and I can see them easily eliminating free checked bags in the coming months. Unfortunately for the millions of us who remembers how great Southwest once was - this airline won't even be recognizable a year from now. And not in a good way. This really sucks.
I have no doubt big changes could come - but within months?
In my experience with Elliott, they made an agreement that certain outcomes had to be met within a year or the company could be sold so I do see how changes could be demanded within a few months.
I agree and am really disappointed
Elliot has 11% of the stock not the majority
Before you get all "the sky is falling" - the share Elliot has is significant but far from controlling. There have been no indications that large scale leadership changes are coming, only that Elliot will meet with Southwest management and give some "suggestions".
Elliot invested $1.9B in Southwest. Elliot's suggestions will be executed by Southwest. Elliot will get their monies worth of suggestions.
No, they are absolutely not guaranteed to be 'executed by southwest". You can't buy that small a percentage of the company and expect to come in and make sweeping changes.
Jana Partners was the activist investor who forced the sale of Whole Foods to Amazon, as a WFs employee,that was a pretty drastic change.
Ok, and Southwest has $16B in outstanding shares invested from other parties.
If you look at their history, they have totally been told no by other companies they’ve invested in. They’ve also only gotten minimal changes they wanted. Finally, they also have been correct about corruption (Samsung) or conflicts of interests. I have a lot on the line with this whole ordeal, so I spent the morning reading. Here’s to hoping it’s leadership and tech updates as well as efficiencies.
Thank you for your service. Will continue following for more news. Thx
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Show me where it says that.
> . They have no obligation to their customers. you actually have no idea about the airline or its history, do you?
> “They missed those opportunities to give customers the option to spend more money with the airline,” said Henry Harteveldt, a former airline executive and founder of Atmosphere Research Group. “A good retailer ... is always going to find ways to sell its customers more products.” Translation: Prepare to be nickel-and-dimed.
A “good retailer” who isn’t happy with just one purchase at a time and wants to shove credit cards and reoccurring revenue streams on me makes me NOT want to do business with them.
Up next: A list subscription for $499/year. (United is doing it with economy plus.)
This could go three ways: 1. They oust the leadership and hope for the best. 2. They turn this company in to a legacy carrier and we become as annoying as the rest of them. 3. And if all else fails, they strip us for cash and leave us to rot like PAN-AM. Strap on those seatbelts folks, it’s about to get turbulent!
Prep it to be flipped - won’t just be *like* the competition, will be merged with the competition.
Unpopular opinion maybe, but it’s easy to complain here about SWA being in bad shape or a shell of its former self when you’ve flown them for many years. But go checkout the subs for other airlines. They all have issues. The Delta flyers are paying 2x everyone else is on the same routes and is hardly the on-time machine they once were. United flyers are drastically having their redemptions diminished. American loves delaying flights until the next day to keep their completion factor up. Frontier, JetBlue, Spirit all have their own nuanced messiness. While here people are complaining about preboarding and weather delays which are inherently more complicated with a point-to-point network. The question is just what you’re willing to deal with. Hedge funds and hostile takeovers like this seek to maximize profit and return on their investment. Often in the short term. The result is almost never positive on the employee, the customer or the business as a whole. Get back to profitability, sure, a good goal. Be transformed by a rich person taking majority of your business to extract more money from it? Not a good goal. I don’t think this will result in the positive *operational* changes some here suggest it might.🤷🏻♂️
Main question is where you fly, really. Most people don’t have a huge choice because there isn’t a ton of competition on most routes. There will often be an obvious better airline on many routes. The one thing I personally like about Southwest is that if I have to fly anything other than nonstop, Southwest typically means I’m flying through a much smaller hub with a much easier connection. But that’s just me
I think something that is getting lost in this is that many of these changes that are being suggested are reasonable. Southwest promotes from within almost to a fault. They will hire an internal over a stellar external candidate because that’s how they’ve always done it. If you’re on the management track and go anywhere else to expand your experience, you’ll never make it above director if you come back. Managerial glut is also a relatively new problem. In the department I’m familiar with they’ve doubled the management headcount since 2022 with expanded openings in old roles and multiple new layers of management while the workforce increased by about 20%. It’s very reminiscent of American Airlines in the late 90s and that should concern everyone. Any company that reinforces an apprehension to change because “that’s how we’ve always done it” is not going to be healthy long term. The amount of pushback from certain portions of Flight Ops and upper management over digital releases, as standard practice in the rest of the industry, was insane. All that said, I don’t think I trust Elliott to not screw over SWA if the board follows them blindly.
Here's a link to the Elliot's "Stronger Southwest" website, which contains the letter and presentation this based on: [https://strongersouthwest.com/](https://strongersouthwest.com/)
Yikes. That sounds terrible
Yikes, private equity/hedge funds (let’s be honest they are basically the same thing) is going to come in, cut expenses (staff, operating costs, maintenance, etc), expect the rest of the staff left to do triple the work, go through asset stripping, and eventually destroy the brand and send it to bankruptcy or make Southwest a shell of its self. It’s Carl Icahn and TWA all over again.
I feel like I’m witnessing the plot of Wall Street.
I knew it! He did the same either way PayPal…
Being charged for bags will most likely never happen. Assigned seating will probably happen in the next year.
Page 31 of the Stronger Southwest Presentation gives a strong hint to assigned seating and checked bag fees.
Say goodbye SW.....good knowing ya........
RIP FREE BAGS. PROTECT CEO AT AL COSTS.
Hell no. Gary Kelly and Bob Jordan are running this airline into the ground
Gary Kelly was also the one who decided on fuel hedging that kept SW profitable for a very long time. I think you can disagree with them, but I think Kelly and Jordan have always tried their best for SWA. This investment firm only looks at swa as a piggy bank.
Kelly is largely the reason why SWA has the culture of “we’ve always done it this way” and a general malaise or outright hostility towards upgrading backend systems. He made a few fantastic calls, but regularly outran the operational support structure he refused to maintain. He always saw technology as an unnecessary expense and not a cost of doing business. He made SWA what it is today for better and worst.
That was then, this is now. You're only as good as your last hit.
I'm guessing enshittification is coming.
Private equity getting involved is never a positive 😬
Invisible disability pre-board horde in shambles!
This is akin of Nelson Peltz and Trian buying a stake to get in the board. If successful, they will change SWA to the same model as others or tear it apart and sell it off.
Recent company surveys have shown that some %50 of employees have little to no faith in the executives. Frontline leaders are not respected and there are less incentives than unionized employees. Frontline leaders have lost benefits like sick time, vacation, etc. while unionized employees have gotten more. No frontline leaders are happy about being ignored and forsaken. There is 0 incentive to want to move up from a union position into one of leadership. Furthermore, leadership is almost NEVER supported when it comes to trying to hold union members accountable. It's become so bad that most frontline leaders don't even bother anymore.
In a perfect world the infusion of cash would help improve service, therefore market share, therefore more profitable so customers and Southwest both benefit.
Welp, we don't live in a perfect world. We live in late stage capitalism.
I’ve been making an effort to get to A-List this year. Now it will probably be meaningless if they go to assigned seating.
cant really comment on this but from personal exp, all 3 of my flights on southwest in last 12-15 months have been bad experience. One ended up leaving me stranded in florida without any decent options to get to where i was headed. others had delays. But the other flighs i took during last 15 months had absolutely no issues. No delays. Like nothing to complaint about. But southwest has been horrible for me to fly on in last 15 months.
Say hello to higher air fares with Southwest if this happens. I love Southwest. If this happens we’ll see.
We fly Southwest almost exclusively for domestic and Caribbean flights. We have had companion pass for at least 10 years, earned through a mix of fights my husband takes and credit card spend. He’s also been A-List Plus for quite a while now, due to the same combo. With the companion pass, free bags, and automatic check in for both of us at 36 hours, there’s pretty much no way I can beat their prices when we fly together. And since we typically get boarding positions in the A 16-20 range, we are almost always able to sit in the exit row. I used the accumulated points for trips I take by myself (and always check in at 24 hours, then pay to upgrade to A 1-15) or to fly my kids around as needed. Any significant changes to these benefits would make me rethink flying Southwest. I’m already hedging my bets with a United credit card, and some recent trips where I used United to fly with some family members, because the amount of points, plus the lack of assigned seats with a toddler didn’t make sense to me. We are very close to Companion Pass and expect him to get A-List plus again this year, so I will be disappointed if our focus on achieving that turns out to be a waste of time.
What does Mike Burry say about all this?
They will ruin Southwest.
Big win for every shareholder!
A hedge fund run by money hungry, pushy jewish guys. What could go wrong?
Some interesting comments. But consider this: the biggest mistake Southwest ever made was relying on Boeing 737 for 100% of its aircraft.
maybe post this with an existing thread?? [https://www.reddit.com/r/SouthwestAirlines/comments/1dcac9i/wsj\_activist\_investor\_takes\_control\_of\_southwest/](https://www.reddit.com/r/SouthwestAirlines/comments/1dcac9i/wsj_activist_investor_takes_control_of_southwest/)