In a bold move that intensifies the ongoing proxy fight, Elliott Investment Management, a prominent hedge fund led by Paul Singer, announced on Tuesday that it has accumulated enough shares of Southwest Airlines to call for a special meeting of shareholders. Elliott's acquisition of over 61 million shares, equivalent to a minimum of 10% ownership stake, grants the fund the authority to convene a meeting where shareholders can vote on board candidates.

With a confrontation scheduled for next week between Elliott and Southwest officials, the hedge fund's increased leverage undeniably raises the stakes in their campaign to orchestrate a management shake-up. As part of its proposed slate, Elliott has nominated ten candidates, including former CEOs of other airlines, to replace current CEO Robert Jordan and Chairman Gary Kelly, the previous CEO.

Responding to Elliott's developments, a spokesperson for Southwest Airlines expressed the company's readiness to meet with the hedge fund, while also hinting at forthcoming details regarding their ongoing transformation plans. "We remain prepared to meet with Elliott next week and look forward to sharing details on our continued transformation at our Investor Day on Sept. 26," the spokesperson stated.

Elliott first revealed its intentions to restructure Southwest Airlines back in June, amid a period where the company's shares have experienced a significant decline of over 50% over the past three years. The hedge fund argues that Southwest's leadership has failed to adapt to the rapidly changing airline industry, emphasizing the need for a revitalized and forward-thinking management team.

Seeking to position itself more competitively in the market, Southwest Airlines made some key announcements in July. These changes include the abandonment of open-boarding in favor of assigned seating and the introduction of premium seat options with additional legroom, both strategies adopted from rival airlines. Southwest has promised to provide more comprehensive details regarding these transformations during their upcoming investor day, scheduled for later this month.

As the battle between Elliott Investment Management and Southwest Airlines intensifies, shareholders and industry observers eagerly anticipate further updates and the potential outcome of the proxy fight. The meeting between Elliott and Southwest officials next week could prove to be a pivotal moment in determining the future leadership and strategic direction of Southwest Airlines.