Southwest Airlines (NYSE:LUV) executive chairman and former CEO Gary Kelly said Tuesday that he will retire next year, a move that comes as the carrier faces pressure for changes by activist investor Elliott Investment Management.
Kelly, who has worked at Southwest for nearly four decades and has been chairman since the carrier’s co-founder, Herb Kelleher, retired in 2008, announced he would step down hours after a meeting with Elliott, which has been calling for leadership changes at the Dallas-based carrier.
Elliott in June revealed a nearly $2-billion stake in Southwest, seeking to oust leadership, including CEO Bob Jordan, who has also spent nearly four decades at the carrier. The firm said Southwest has had “stunning underperformance” under their leadership.
The carrier has struggled as it faces an oversupplied domestic U.S. market, higher costs and aircraft delivery delays from Boeing, its sole supplier. In July, it announced it would offer extra legroom on its aircraft and do away with its open seating policy, the biggest changes in its more than 50 years of flying.
Southwest has an investor day scheduled for Thursday, Sept. 26 in Dallas to expand on these and other initiatives.
Southwest began trading Tuesday down 92 cents, or 3.1%, to $28.81.
