Will Gary Kelly's retirement at Southwest fully satisfy Elliott's demand for a management shake-up?

It's a safe bet to assume that (after a 9-Sep-2024 meeting with the activist investor Elliott Management) it wasn't exactly the way Gary Kelly planned to announce his retirement from Southwest Airlines, a company he has served for nearly four decades.

But Executive Chairman Mr Kelly and CEO Robert Jordan have been under pressure since Jun-2024, when Elliott made a nearly USD2 billion investment in the airline and proceeded to demand a shake-up in Southwest's upper management - including the removal of Mr Kelly and Mr Jordan from their roles and an overhaul of its business.

At this point it's not clear whether Elliott will be satisfied with only Mr Kelly's decision to retire in the spring of 2025.

Mr Jordan's fate could remain uncertain, given that six of the company's directors are retiring in Nov-2024, and Southwest plans to consider three candidates previously proposed by Elliott.

It's a major development for a company whose low cost model has been replicated by airlines worldwide, and it signals that Southwest's future is more uncertain than its storied past.