Southwest Airlines (LUV) is starting the week on a positive note, with its shares trading slightly higher in premarket trading. The company attributed its positive start to a successful summer travel season, highlighted by zero cancellations on Labor Day, marking another peak season of reliable operations.
During the final summer travel weekend, Southwest Airlines delivered strong service, connecting over 1.8 million customers on 14,500 flights with a remarkable 99.9% completion rate. This performance was a continuation of a positive trend throughout the summer, as the airline carried a record 54 million customers on over 414,000 flights. The airline also reported improved on-time performance and a 99.3% completion factor for the entire summer period.
In July, Southwest Airlines reported a quarterly revenue increase of 4.5% year-over-year, driven by strong passenger numbers and ancillary revenue. However, despite the strong operational and financial performance, Southwest Airlines is facing a challenge from a major shareholder, Elliott Investment Management.
Elliott Investment Management, which holds roughly an 11% economic stake in Southwest Airlines, has publicly disclosed its plan to nominate ten independent and highly qualified candidates for the airline’s Board of Directors. Elliott Investment has previously advocated for three critical actions to restore Southwest Airlines’ position – reconstituting the Board, installing new leadership, and conducting a comprehensive business review. This move suggests a potential power struggle within the company, with Elliott Investment seeking significant changes in leadership and strategic direction.
Investors seeking exposure to the airline sector can consider investing in U.S. Global Jets ETF (JETS) and Themes Airlines ETF (AIRL).
As of Wednesday morning, LUV shares are up 0.24% at $29.65.
