Change is Coming for Southwest Airlines!

[@MentourNow]

Go to saily.com/mentournow and use the code mentournow to get an exclusive 15% off your first purchase.

[@Kobby_Sweetboy]

Please now that you are on break, we need more videos on the MENTOUR PILOT channel, at least two videos every week. #WENEEDMORECONTENTS

[@blablablablablablablablablbla]

It's actually infuriating how when the topic goes to this subject, everyone is suddenly an expert on business, economics, and stocks. Just like they were experts on virology, Ukraine, and everything else depending on the season. I know enough about this subject to say most of the comments are nonsense drivel.

[@seriouscat2231]

Please focus on plural vs. singular in your speech. An individual "does", many people "do", även om på svenska alla bara gör. Your English is otherwise remarkably good, but this is the one thing I catch now and then.

[@phpn99]

We used to call these guys Corporate Raiders, which is more appropriate than "Activist Investor", which is utter BS.

[@henghistbluetooth7882]

They’re always tough and dramatic sounding titles. Goes along with ‘bull market’ and ‘bear market’. Projection much.

[@VanillaMacaron551]

Corporate raiders seek full control. Activist investors buy a tiny number of shares.

[@kavinskysmith4094]

He's from Europe, their used to taking it up the backside

[@georgeprout42]

​@@kavinskysmith4094in Europe we have free education and healthcare. Not multiple mass shootings daily. And no, you can't come here.

[@ninjalectualx]

"Activism" usually refers to the environmental good guys, it was shocking hearing it used with a negative connotation here. Is this actually normal financial terminology?

[@jasonnchuleft894]

The problem is that most of those activist investors are only interested in short-term performance. Meaning they don't care what happens after they've sold their shares. So sure Southwest might improve its stock evaluation but what happens after that? Removing seats from a plane doesn't magically make it smaller and more fuel efficient. Nor does it reduce maintenance overhead. Not to mention charging more for "premium" seats just moves them closer to the already pretty close competition. Innovation doesn't mean just barely doing everything everyone else does 😶

[@MentourNow]

That’s fair remarks

[@johnmckeon4498]

This is my thought too. They're okay with anti-consumer practices. Because all they need to do is make the stock price artificially go up sell off their stocks and then if Southwest or any other company that they do this to crashes and burns afterwards even to the extent of going bankrupt from angering their customer base they don't care because they already made their money.

[@johnmckeon4498]

Considering that our transportation system is so privatized. And this kind of anti-consumer behavior destroys transportation companies. I feel that the government has a right to step in and better regulate how this is working on the economic side.

[@pyrpoi]

​@johnmckeon4498 i do not understand this argument. Because X sector is private and anticonsumer, the government should step in. Do you mean government should take over, directly or do you mean regulation? Would you make the same argument with other economic sectors, say tech or agriculture? I think I've followed the premise but not the conclusion. Could you please elaborate.

[@LetztezBatallion]

@@pyrpoi Do you mean government should take over, directly or do you mean regulation? => Both are fine, and both have their pros and cons. Case by case basis Would you make the same argument with other economic sectors, say tech or agriculture? => Yes, any sector of the economy that's so highly privatized and blatantly anticonsumer and antiworker, to the point entire companies and all their employees (plus consumers of that company) get screwed over because of a few rich guys that want to be even richer should be more regulated and/or directly intervened. Hope that answers your questions!

[@thomascee]

If they are trying to turn Southwest into the other airlines, that is an absolute tragedy. Activist investors. What pieces of trash.

[@JDashRider]

What? They’re just like any other airline except their on time performance is fifth best behind the big 3 and Alaska. Not something to brag about for a company that only knows how to fly one type of plane.

[@thomascee]

@@JDashRider NPC

[@Coolsomeone234]

​@@JDashRider You're not wrong, their operation is horrible but people are idiots.

[@ironcito1101]

Assigned seating sounds like a basic "feature" to me. I didn't even know that airlines existed where you just seat wherever. I can imagine people pushing and shoving to get some seat, arguments breaking out.

[@dannydaw59]

Discount airlines are losing money with their business model, so how are investors evil for changing to a business model that is succeeding?

[@noreverse1152]

This is the sheer irony of an "activist" investor coming from outside and pretending that they can fix a company. I have seen this countless times in my time in tech sector. It never worked out well because all the "activist" is after is ROI over 5 years.

[@mytech6779]

Fewer years if they can manage the pump and dump well enough.

[@SeekingTheLoveThatGodMeans7648]

@@mytech6779 Well, we're going to ride this roller coaster till somebody sees fit to change the rules.

[@jamescollier3]

well, they could replace and upgrade the computer systems

[@robincray116]

Over 5 years sounds generous are you sure its not 5 months?

[@mytech6779]

@@robincray116 At least a year so they can claim the long term capital gains tax rate.

[@jeremypearson6852]

I hate the whole activist movement. Just because a single individual or entity has enough money to buy a chunk of a bus, doesn’t make them experts in running a company. A hedge fund bought the pharma company I retired from and they recently cut many long time employees. The company was already very profitable.

[@dan-bz7dz]

They wouldn't be running the company. Only nudge it in another direction. All they have to do is to persuade the other shareholders. As in any election.

[@Saml01]

Ryan Cohen has entered the chat

[@jimallen8186]

won’t be profitable for long; will be split into entities so as to more easily shell costs upon one entity that can go bankrupt while siphoning value through another entity. All part of the privatize gains socialize costs movement.

[@airdailyx]

well, if companies want to be insulated from stuff like this, then they should not allow themselves to be publicly traded otherwise it’s wide-open hunting season because that’s the way the system works.

[@ninjalectualx]

Venture capital destroys everything it touches. Destruction is literally the business model

[@AndyVernel]

It troubles me that Southwest will stop being Southwest and they'll turn into another Spirit or Frontier.

[@marckyle5895]

I'd rather fly standby on Southwest than first class on Spirit. NEVER. FLY. ON. SPIRIT. AIRLINES

[@OTRTrader]

@@marckyle5895 Awww come on bro... You talking a bunch of bananas.🍌

[@DabNaggit]

@@OTRTrader maybe they're to pacify the passengers on the average Spirit Airlines flight...

[@PureMagma]

They'll be a clone of Delta and United... anyone wanting that "treatment" already flies with those airlines. They need to leave Southwest alone because they are by far the best EXACTLY AS THEY ARE! "If it's not broken don't fix it!" is an adage for a reason. It is the economy that is broken--not Southwest Airlines.

[@DabNaggit]

@@PureMagma except they suck now. Used to be good.

[@d_mosimann]

So yet another company is starting to focus on shareholder value primarily. That's very bad news for employees and customers. And what such a culture can lead to, can be seen at Boeing.

[@SeekingTheLoveThatGodMeans7648]

Petter knows, too, because he has to fly the outcome.

[@d_mosimann]

@@SeekingTheLoveThatGodMeans7648 Not anymore, he's doing KZbin full time now.

[@mrvwbug4423]

Well in the case of SWA, without changes they were going to be bankrupt within a few years. They were complacent too long and their competitors took a ton of their market share.

[@tomh648]

Regardless of recent religiously-held political beliefs, the shareholders own the company. SWA has suffered greatly under their current leadership. Herb Kelleher would be ashamed.

[@CHunt-cz1ek]

Perhaps Elliott should consider "fixing" Boeing...

[@philiphumphrey1548]

Yes. Get them to stop wasting time and energy on D.E.I., sack "diversity managers" etc. and refocus on excellence in engineering and safety.

[@jimallen8186]

@@philiphumphrey1548 DEI had nothing to do with Boeing’s weakness. Jack Welch aclolytes did. DEI has nothing to do with having moved away from engineering, if anything DEI candidates are more focused on things other than stock value. Cost cutting and socialization of risk while privatizing profit is a very white male particularly English male thing to do which is to say what went wrong at Boeing is the opposite of DEI.

[@mytech6779]

@@jimallen8186 "socialization of risk while privatizing profit" happens to be the definition of the Equity in DEI

[@Synergy7Studios]

​@@jimallen8186lmao socializing isn't a white male thing. Most proponents of socialism are Jewish or some other non-white. DEI hires are concerned with maximum pay check for minimal work and minimal qualifications. They skate by and fail upwards constantly.

[@filanfyretracker]

@@philiphumphrey1548 DEI has nothing to do with that, stop spreading such Fox News myths that are usually regurgitated by Elon's twitter account. Boeing was gutted out because it became totally focused on Wall Street satisfaction, At all costs they had to jack up the share price. Boeing's downfall was 100% caused by letting the management of McDonnel Douglas become the management of Boeing during the merger. MD management was purely share price focused and Boeing was engineering focused, Because they knew a well engineered product made money, just not as much as a purely cost focused operation.

[@kidjackson987654321]

The problem with this activist investors is that they only aim for fast profits and stock increase. They dont care what happens after they sell

[@agayoso27]

Thats what all wall street does...

[@svgalene465]

Similar to a private equity takeover, which happened to the company I work for. It went from being repeatedly voted one of the best companies in the U.S. to work for to being unable to hold on to its experienced workforce and barely fending off bankruptcy.

[@kidjackson987654321]

@@agayoso27 agree but probably not to that degree

[@benchoflemons398]

People keep saying that, but it is not true. The market is forward looking, management might not be but the market is always forward looking. There have been some great meta analysis on this lmk if you want.

[@kidjackson987654321]

@@benchoflemons398 we are not talking about the market in this case.

[@JM-vh7oc]

I have been a longtime loyal rider of Southwest. I was so sad when they announced they were changing over to the same model as the other airlines. Most all SW flights are 100% booked. Most of us like the open seating by category, plus how easy they make it for pricing by not charging all the extra fees. Baggage is no cost and ease of making changes to the reservations If they change to be like the other airlines, there will no longer be an incentive to be loyal to them. They are a little higher in pricing generally - but think those of us that like the current system do so because it is so convenient for us. IMHO - bad move by SW to become just another carrier.

[@StunningModelAaliyahAustin-k7g]

Activist investors can be a good thing but that's the rarest possible case. More likely is seeing them gut the organizations they interfere with, firing huge amounts of staff, selling off assets, etc. There's a reason they're called vulture capitalists.

[@RS-ls7mm]

Sounds like Boeing. They did this when they bought the very successful company I worked for. Mostly destroyed now. Corporate raiding at its worst.

[@JamesDavidWalley]

It sounds like their plans (premium seating, baggage fees) will essentially turn Southwest into just another standard, non-LCC airline, but without some of the amenities of the legacy carriers. Not a great deal for the average customer.

[@NicolaW72]

@@JamesDavidWalley And surely not the way to make Southwest profitable on the long run - but probably enough to get away with a bunch of Billions of Dollars on the short run.

[@99domini99]

So basically just another rich fuck destroying everything for his own financial gain?

[@DoktorHalloween]

Oh, I didn't realize that, the vulture capitalist has been spun into an activist capitalist?

[@msmith53]

Thank you so much for this “expose” of Elliot! As a frequent customer of SW Air, I have noticed slight changes and wondered WHY? The insidious chicanery of some of these investors affects the unsuspecting clients/passengers. You are a ray of sunlight! Thx!😊

[@idanceforpennies281]

"I am not the destroyer of companies, I am the liberator of them". Wall Street, the movie, Gordon Gecko.

[@operacarmen]

Anti-semitic movie and anti-semitic comment

[@LoremasterYnTaris]

@@operacarmen I'd be curious to your reasoning on calling this an antisemitic comment. Seems pretty relevant to the subject matter to me.

[@idanceforpennies281]

@@operacarmen Bat shit crazy comment. With zero likes.

[@operacarmen]

@@LoremasterYnTaris clearly was criticizing the behavior of semitic inverters .. stop acting clueless

[@gregswank4912]

When I first started flying on Southwest I was annoyed by the lack of seat assignment, but once I got used to it, I found it actually works quite well. One of the reasons I loved Southwest, was the lack of baggage fees. As a consumer, I don't like getting dicked around by hidden fees, and like to see the full price up front. Fees make me feel like I'm getting ripped off. Many times I found that once you add the hidden fees on, Southwest became the best value. I have recently tried other budget airlines and felt like I was on an inner city bus. I refuse to ride on any plane that treats us like cattle, or makes the seats uncomfortably small, close, and uncomfortable. Flying on a plane shouldn't be like a pain tolerance marathon.

[@ohheyitskevinc]

The only “financial activists” SWA majority owners need to listen to are: the passengers. Elliott may have thrown $1.9 billion at the airline, but the passengers throw $7.35 billion at the airline every single year and are by and large happy with them. If Elliott were interested in the passengers - fine. But they’re looking at profit, not passenger satisfaction.

[@AlbertoNencioni]

WHY should be Elliot interested in passengers? They are interested in making money. By the way, United is ALSO after money: passenger's satisfacion and love are by-products, they are welcome but do not pay salaries.

[@doujinflip]

Unfortunately US laws compel corporations to prioritize their shareholders over their stakeholders.

[@SeekingTheLoveThatGodMeans7648]

@@doujinflip This is, to me, an obvious "Well, FIX it!" situation. Well, we may well have a reformist wind coming at us this November. Let's make the most of it if it does.

[@nomore6167]

@@AlbertoNencioni "WHY should be Elliot interested in passengers?" - Because if the desired changes are implemented and they cause passenger (customer) dissatisfaction, then the passengers will go elsewhere. And without passengers, the airline goes bankrupt. See how simple that was to connect the dots?

[@NicolaW72]

@@AlbertoNencioni Exactly.

[@niftybass]

Southwest has been my favorite for decades. Part of what I like is that they're not like the rest of the airlines. They don't try to bullsh!t their customers. The fact is that an airline passenger is ultimately buying a ticket for a seat in a metal tube to hurtle through the air on the way from point A to B. They don't distract themselves with trying to emulate all the complexity of a lot of special cases and different classes of passengers. That said, adding 3-4 rows of premium seating isn't too bad, but keep the number of options to a minimum. Things like charging extra for a reasonable amount of baggage for a week is infurating to customers. Southwest has focused on their customers' wishes: An average seat on a well-maintained plane with better than average pilots, better than average safety, and cheaper tickets than most other carriers. If Southwest became like TWA was, I'll never fly with them again. I'm talking about high ticket prices, and assuring passengers that TWA's seats & metal tubes are somehow better than everyone else's, while having the worst on-time of any carrier I've ever flown. That's ultimately a recipe for bankruptcy, which is the Darwin Award of the airline industry.

[@BriGuyIT]

Not sure exactly what the industry would call replacing senior management and 10 board members. I'd definitely call it a "hostile takeover."

[@Synergy7Studios]

A lot of customers, myself included, are very attracted by the lack of assigned seating and free checked bags. Its one of the main reasons I choose southwest because it shows me that they're still a company with real people behind it, not a cold machine designed to extract every dime from their customers.

[@walk4718]

As a Texan, Southwest has always been a hero in my eyes. Your video is the best summation that I’ve seen that explains the problem. Hopefully a few “tweaks” in the short run will hold off the wolves until the Max 7 comes on line.

[@mrvwbug4423]

SWA the "good" Texas airline vs American who are probably the worst legacy carrier in a first world country. Or should we call American by their correct name, America West haha, though to be fair AWA was actually a decent airline before they started playing corporate identity theft with USAir and AA.

[@Elementalism]

Southwest has been the most consistently profitable airline in the country. This guy is going to change them into American, Delta, or United and then wonder why their profits mimic those airlines as not being consistent and require bankruptcy protection every 15-20 years.

[@rreichar1]

No assigned seating and no fees for checked bags are features not bugs IMHO. They’re the primary reason we have flown Southwest for many decades. They are some of the things that differentiates them from other airlines.

[@falcon_three_fifty]

One of the many reasons I love flying Southwest is there is no assigned seating. These greedy changes are unwanted!

[@mrvwbug4423]

That's also one of the biggest complaints that people have about SWA. They said they won't charge for assigned seating, which means they're giving up their "pay extra for earlier boarding group" for what they hope will attract new customers.

[@riel0563]

​@@mrvwbug4423they won't charge for now. When enshittification starts, they will.

[@wren7300]

One of the reasons I don't like flying them is because of not being able to pick my seat. And data shows that's what a majority thinks too.

[@Josh-b3c]

I mean you've got to admit they've got some balls on them I own 10% of the company so I should get to make 90% of the decisions and I'm going to get rid of the top two people and then 10 out of 15 of the other people

[@jimallen8186]

If the other 90% of owners aren’t forming a bloc..

[@mytech6779]

Most investors are passive and don't go to meetings or vote, usually just a few major mutual funds and other holders of 5-20% that actually show up and know the details resonably well.

[@mrvwbug4423]

Well if you own 10% of a company, you only have to sell your ideas to 40% of the other shareholders to make changes.

[@mrvwbug4423]

@@mytech6779 Yup with airlines, most of their stockholders are mutual funds, index funds, etc. aka "institutional investors"

[@riderpaul]

Offering premium seats and charging for baggage will destroy Southwest.

[@rogermwilcox]

Assigned seating? Checked bag fees? It WON'T BE SOUTHWEST AIRLINES ANY MORE if they do this!!

[@bemist7954]

AMEN!

[@msromike123]

Maybe Elliott is saying they should have gone bankrupt for increased profitability?

[@alexevansuk]

Buy in, scare existing and potential shareholders. Buy more shares

[@mytech6779]

Exactly, there are many in business who see bankruptcy write-offs and government bailouts as legitamate revenue streams.

[@axelBr1]

South West Airlines made a profit for 47 years! Wasn't it Warren Buffett who said "The only way to make money with an airline is to start with a lot of money." Also, saying that Elliot Investment was involved with Barnes and Noble and Waterstones isn't the flex they think it is as both companies have disappeared.

[@XMysticHerox]

"Activist" investors is a weird term. They are mostly just doing it for personal profit. Hardly activism.

[@mytech6779]

Active investors rather than passive investors is accurate. "Activist" seems to be a rather poor twist of language.

[@gagamba9198]

You don't understand things. Activists are those who want to change things in ways they deem better. In business the goal is to earn a profit, preferably to maximise it. Why does a person buy shares in the company? To get a portion of that profit in the form of dividends and/or to see the value of the share increase. Both are these are personal profit, though some investors invest on behalf of others such as a pension fund. They aren't buying shares to frame and hang on the wall. The profit one earns should be at least commensurate to the risk. Anyway, nice to see a viewer from Pyongyang,

[@gagamba9198]

@@mytech6779 No. A passive investor hands funds over to a someone else such as professional fund manager to invest on his/her behalf for a fee. An active investor is one who does the research on his/her own. An activist investor is one who holds no managerial or board of director role in the company but wants to make changes to the company to improve the bottom line so that the dividends and the share price increase. There is no twist. Activism consists of efforts to promote, impede, direct, or intervene in social, political, economic, or environmental reform with the desire to make changes in society toward a perceived common good. The activist investor in this context is promoting economic and social change at Southwest. The society is Southwest Airlines and the common good is the betterment of all the investors' investment in the corporation.

[@christianwall7181]

@@gagamba9198 That’s the problem though: Elliott is famous for taking very little risk. Its activist investments are typically hedged and derivative based (using borrowed stock) so it has very little downside, but benefits very significantly from anything short term that lifts the price e.g. leverage and and stock buy-backs, which is clearly the intention here, even if not overt.

[@cageordie]

This is usually asset stripping. They want to cash out part of the company to get a load of the cash for themselves. That trashes the company. Cabela's was the top hunting store, but they sold them off to Bass Pro Shop which is basically the Wollworths/Kmart of outdoor stores. Totally trashed the company. They used to have great quality clothes, and now they sell cheap trash. You assume these people are making an honest attempt to run the company more effectively, rather than a way of making a quick buck.

[@Starship007]

I live in Hawaii. Southwest started flying to Hawaii around 3-4 years ago. The crew flys to Hawaii then flys interisland for a few days before returning to mainland USA. When Hawaiian’s 717’s are completely full interisland the SW 737 Max’s are half empty. Such a large plane for island hops.

[@Brillig2]

They still use 717's?

[@finchman1]

@@Brillig2Yes

[@jaysoncook77]

As a former and long time employee. This is much needed. Upper management had been disconnected for the past 15 years. We all have seen it and expressed it to deaf ears.

[@Coolsomeone234]

Finally a sane comment here. That company is embarrassingly overstuffed in management. How many managers do you need, really?

[@alexnicolaou3579]

@@Coolsomeone234 we have a saying for that. "too many chiefs, not enough.. [native Americans]"

[@vintagelady1]

I wouldn't trust those greedy money sharks any farther than I can throw them. There was another huge missing piece in that Elliott presentation---customer satisfaction & loyalty. And their slick little 51-slide presentation could have been broken down into exactly one statement: Southwest needs to become just as shitty as all the other airlines with their deliberately deceptive pricing & complete lack of concern for their customers. Pfui! My daddy taught me to live by the rule,"If it ain't broke don't be fool enough to fix it. So WHAT if SW revenue has gone down---are they still able to pay their employees & buy fuel & maintain their planes & their CEOs' salaries? This is purely a money grab by a greedy company for their greedy investors for whom there is never enough wealth b/c that's all they value. It's the American way.

[@foxracing8973]

I watch a KZbin account called Bright Sun Films that makes videos on big companies that have gone bankrupt in the past. Easily 90% of the stories all have one thing in common before they went bankrupt: some kind of investment management company did to them what Elliott is doing to Southwest...

[@Private-GtngxNMBKvYzXyPq]

I’m just waiting to see how long Southwest ends up being another Bright Sun episode. It’s always a hedge fund or an activist investor.

[@miramichi30]

This is like blaming the doctor when a cancer patient dies. Activist investors don't get involved when business is booming.

[@LoremasterYnTaris]

@@miramichi30 True, but they love to get involved when business is good enough. Then they strip away everything they can and make a quick exit with as much value as they can carry, leaving everything else to die. That's why sane people call them what they are: corporate vultures.

[@blablablablablablablablablbla]

I was a stock trader for a good 10 years. This situation is actually pretty uncommon. Maybe that channel is deliberately searching for those stories since it riles people up.

[@blablablablablablablablablbla]

@@LoremasterYnTarisTell me you know absolutely nothing about stocks without telling me. A profitable company is worth so, so many more times than the value of just liquidating a company.

[@scoopydaniels8908]

It sounds like every company they've gotten involved with has done WORSE for their involvement with this Investment Group.. thankfully I have never been and don't plan to be involved with Southwest Airlines

[@TheLifetraveler1]

Has a shareholder in Southwest who has invested in the company for more than 15 years. I see absolutely no reason to have these idiots messing with a good formula.

[@rynovoski]

Petter: you're not thinking like an American capitalist. What you may be missing is that investors like these do not feel that avoiding bankruptcy or restructuring is a good thing, they think it's a missed opportunity to screw over their employee groups, suppliers, etc., in a favorable venue for cutting costs. I am very confident that they would point directly to what these carriers did in the decade after 9/11 and the money they saved by gutting employee groups. They could be making more money be shafting the customer and charging fees and all sorts of other things. How the airline performs financially or in terms of customer satisfaction doesn't matter AT ALL. Shareholder returns are the only thing that matter. This place is a hellscape, pure and simple.

[@richardclark4610]

Southwest is popular with the American flying public because it's CHEAPER to fly on Southwest! Adding premium (more expensive) seating and charging for checked bags etc will, in the long run, COST them customers and further reduce their bottom line....be careful what you wish for!!!

[@Nehpets1701G]

They need to move with the times, but Elliott are not in this for the long game. They need to be careful of being pinned down by stock market parasites.

[@barbborja1910]

I’m sorry to hear that Southwest is changing to match the other carriers. The biggest reason I fly SW is because they DON’T nickel and dime you to death and that the price you pay for a ticket is the end of it. Basically, if I wanted what other airlines were offering, I wouldn’t fly SW to begin with. Since they will be just like everyone else, I have no incentive to fly with them anymore.

[@dcxplant]

Some of you young people have never heard of Frank Lorenzo's or Carl Icahn's antics in the airline business. Re the Max's, even the larger, burns 20% less fuel than the older 737 with CFM's due to the LEAP engine. This throws apples to apples comparisons out the window, as the comparison is apples to oranges. A compensating factor must be in the comparisons between older 737's and the Max's with LEAP engines.

[@jimallen8186]

Jack Welch

[@juneabbey9538]

Yes and no. Sure, a part-empty Max-8 burns less a little bit fuel than a full -700 with the same number of passengers, but it is still costing a lot more to run because of the capital cost. The -700 is worth little and long since paid for; a new Max-8 (even if purchased at a big discount off list price) costs many millions, and that capital has to be serviced - whether that is in leasing charges, interest on a loan, or interest forgone if you have paid cash up front, it's still big money.

[@mrvwbug4423]

@@juneabbey9538 There's also labor charges involved. A -800 requires one additional flight attendant vs a -700 so that is one additional crew member that has to be paid. SWA runs 147 seats for a reason, they need a 4th FA at 150 seats. Same reason why JetBlue runs 190 pax on their non-Mint A321s, at 200 pax they need a 5th FA (the general rule is you need 1FA for every 50pax, and aircraft with 19pax or less capacity can fly without a FA).

[@roberre164]

The names Lorenzo and Icahn still sends shivers up the spine. The airline industry seems to attract the worst of the worst "management".. cue Alan Joyce, Dixon and many others.

[@scriptorpaulina]

So they ruined Barnes and noble, they fucked up Cabela’s, and now they’re going to screw SWA. And they’re starting by making it more like every other airline

[@pgramsey1]

You forgot Sears.

[@JockMurray-v1o]

Didn't Carl Ikhan do a number on TWA years ago?

[@scpatl4now]

Yes. He destroyed TWA

[@christinecain5094]

I’m a loyal SW flier for years. I get good customer service and some perks without having to spend a lot. The free checked bags are a huge deal for me. I recently flew to a conference where I had to bring a suitcase full of books. It wouldn’t have made sense for me to fly them without the free checked bag. I paid a little more for an upgraded boarding position ($20) because I had a 45-minute connection in Atlanta. I appreciated being able to do that so I could be in the third row. It didn’t cost me hundreds more. If it comes down to them being the same price as the other major carriers, I’m not sure I’ll be as loyal.

[@wildzach]

Open seating was always my favorite part of flying Southwest 😢

[@johnskrb]

I love the open seating, free checked bags, and friendly customer service, and will likely reduce the percentage of my flights on SWA if they eliminate those features.

[@walmartdog1142]

The owner of the failing Steak and Shake chain has bought a huge stake in Cracker Barrel, trying to **F** it up too.

[@jimallen8186]

Did they F it up or is it piracy meaning siphon away the value and leave other “stakeholders” holding the bag?

[@walmartdog1142]

@@jimallen8186 Used to be a good place to eat, good service etc, Not now.

[@SwordQuake2]

Ever heard of punctuation and actually spelling out words?

[@johnsrabe]

The elephant in the room is the lack of any discussion about the customer experience. Are we going to get more leg and arm room, or continue to be squeezed into a tinier sardine can?

[@originalbluebuddha]

If Elliott has their way, you'll be paying for oxygen by the gulp on the flight.

[@cylonred8902]

The "activist" wants to make Southwest a normal airline and less of a unique, lower cost airline

[@larrydugan1441]

I have yet to see an activist investor that didn't strip out the assets and load the airline up with debt.

[@CM8008s]

Southwest Airlines was unaffected by the CrowdStrike Microsoft outage due to their system running on Windows 95.

[@HertsCommuter]

Having seen a lot of private equity plays, the goal is short term gain from leverage (debt) and asset disposal, leaving a business solely reliant on a stable cashflow. But the cost-cutting required to achieve that strong cashflow and the lack of assets to fall back on in the hard times means that at the first hiccup the business fails, the activist investors or private equity having long since recouped their capital by way of dividends from the short term profits. Sure, not all of them play out like this, but many do.

[@Slider6]

If/when sssigned seating and charging for bags happens, I'll never fly SWA again.

[@JMG717]

2025 is shaping up to be a GREAT year already* *note to sarcasm

[@DoktorHalloween]

Southwest has been my favorite domestic airline. I was even caught in the travel SNAFU. What makes Southwest so good, for me, is, they treat me like a person, like I matter. Even with the travel SNAFU. When Mr. Kelleher died I was concerned Southwest's business model could be at risk. And, I heard about this "activist investor" this morning. Time will tell, and I fear Smelliot could spell the destruction of a great airline in favor of squeezing profit out of every kilogram.

[@symbionese2348]

"Kelleher here; OPEN the door!" "Sorry, Herb, we're boarded. You can catch the next one." Southwest Airlines stayed on time (unless providentially detained.)

[@MonkPetite]

Well… on your question about a Activist investor .. MD was bought by Boeing.. the story is well known as Netflix made a document about it. MD won 😂

[@mrvwbug4423]

Yup, MD's shitty management practices took over Boeing.

[@tomedgar4375]

Southwest used to be my go to for travel, no longer. Customer service and employee attitude has lost my business. Add their reduced legroom and I happily pay more to fly elsewhere. Mistakes happen but there is no excuse for rude.

[@Basement_crusader]

Southwest stopped being my go to when they suggested I euthanize my parrot in order for me to complete the second leg of my flight because someone forgot to tell me that birds are except from their carryon pet policy.

[@ButterBradb]

​@Basement_crusader took a 5 second google search to find this, do you due diligence my friend! Doesent excuse how you were treated though.

[@mytech6779]

​@@ButterBradb Yeah people don't read. Alaska had to reduce their carry-on size for everybody because people who failed to plan had problems when connecting to other airlines with smaller limits. (A clear warning saying "This is larger than other carriers' size limits. Do not use for connecting flights." [paraphrased] didn't seem to help.)

[@jamescollier3]

dei and 2020 the economy

[@CantEscape1.5M]

When I heard they broke down I honestly thought it couldn't get any worse.

[@Anurania]

I've lived in the US for over a decade and Southwest is the only airline I've ever used here. I love that bags are free, and it's also the cheapest airline for tickets. I've always been able to fly anywhere in the mainland for under $100 each way. If the ticket price changes at any time after you book they also let you get a credit for the price difference, so I have hundreds in credit to pay for future flights because I request credits when they do those $50 sale weeks. The open seating policy is a bit frantic because you have to check in at exactly 24 hours before the flight to get near the front of the line for boarding and find good seats but I've never had a problem doing that. I'm not opposed to assigned seating as long as they don't charge for it and you just select from the available seats when you book. If they start messing with the core of their business model they could lose me as a customer though.

[@eltecladistadeloeste]

In Argentina we call them "vulture founds", they are plain criminals

[@NekomatchaJun]

Premium seats on planes larger then their routes need makes sense to me, but all the other changes erase what made Southwest meaningfully different to other airlines while also forcing ticket prices up across the board. We go to Southwest for reasonable prices and a relaxed experience. Also, anyone who forces a radical change in management is highly suspect in both methodology and motivation. Elliot is an investments company, which means the dollar is their only concern. They don't care about anything else and will most likely encourage running the company into the ground for the highest profit possible in a short term period. I've seen it across multiple industries and have worked for companies with this planning in the past. I wouldn't be shocked to see complaints of poor work culture and environment with low morale within their 12 month plan to increase share prices.

[@jason6919]

A close friend of mine was in M&A acquisitions, and he called it the parachute crew. They went and then found weakness areas. Grab your popcorn. This only gets more interesting.

[@SkydivingSquid]

I just fly Southwest Airlines for the first time a couple weeks ago, round trip. I thought it was fine. The crew were incredibly professional and interactive. I have no problems with them at all. It would be nice if their fleet had entertainment systems onboard though.

[@MrGus.1]

Heck! Back in the late 70s I took one look at the tiny fleet and the 3 city "network" and decided I didn't want to work for, nor invest in SWA. I totally misjudged the power of Herb. Today, SWA needs another Herb.

[@nickzales6117]

If you think the super rich have your best interest at heart name me anytime that ever did anything to help you.

[@KCFlyer2]

Southwest airlines was the leader when their focus was 1.Employees, 2. Customers and 3. Shareholders. Over the years they shifted that focus to Shareholders first. And then they started cutting corners to provide more shareholder value. It's one of the last companies to follow the Jack Welch school of management. So it's fast becoming just another airline.

[@mrhumpty]

Assigned seating is going to suuuuuuuck.

[@davidnoticiero6728]

I fly 20-30 times a year for business and the vast majority of those trips are on Southwest Airlines. Southwest is not the cheapest fare but with all of the equipment I travel with the 2 free checked bags and singular seating class make it my preferred choice for flights. That said, the end of the open seating policy and upcoming sales of premium seating is for me a troubling development, if the free bag policy ends then it's no different than flying American, Delta, or United, and I'll take my business to the legacy carriers because they will have lost their competitive advantage of value I'm loyal to the culture and differences of Southwest if Elliott decides to squeeze every last dime from passengers then I'll shed no tears as I leave them behind.

[@a62dave]

“Long term expenses? Irrelevant to us. We already have our profit and have moved on.”

[@SandraHof]

I left the US over 11 years ago. I return once a year to visit my two brothers and some friends. I always fly SW for my travel within the US. I am happy with them. Plus I often need to buy clothes/shoes while in the US, so I like their 2 free checked bags policy. I do not understand all the hate for them. The thought of them possibly making big changes makes me nervous.

[@inmitch]

I don't trust Elliott or ANY of these investment companies. Investment companies have no interest in the consumer and Elliott has already ruined Etsy. I'd like to see the end of these investment companies all together, or at least some extreme regulation.

[@billscarnage]

This could be the beginning of the end for Southwest. "Activist" investor is just the new liberal term for corporate raider. Who was it.. Stephen Wolf who made a career out of this.

[@ryanroberts1104]

I fly SW a lot because of the price, open seating, and lack of first class. If those things are no longer on the table, there is no reason whatsoever for me to fly with them.

[@tori8380]

They’re corporate raiders, not activists.

[@king-space-snake]

I suppose technically Elliott is an activist investor, better descriptors are vulture fund and corporate raider. Goodbye SWA, you were always troublesome, but somehow endearing. I'm honestly a little disappointed in Peter's take here.

[@Gregory-ug1ft]

If SWA appeases Elliot by changing to look like all the other airlines, assigned seats, no Bags Fly Free, why would I or anyone else remain a loyal customer? This is what SWA is truly putting at stake by appeasing Elliot.

[@TheLifetraveler1]

Leave my SW alone.

[@dronyland]

There should be a law against this kind of practice. Big corpo with big money should never be able to buy that much share of a company. Especially if it's just to dictate what they can do or not do afterward. Leave the share to regular people, and the company management to their CEO.

[@davidbutton3500]

Companies need to spend money to innovate. If they spend money on that, then how will the execs be able to afford their increased salaries and bonuses? It happens to every company eventually. Greed at the top will always be more important that the future of the company.

[@jimallen8186]

Did you watch the episode? The greed here is with the outside intruder, not any internal greed. Those at the top had been there forty years, these weren’t short term profit grabbing persons.

[@davidbutton3500]

@@jimallen8186 Yes I did. Did you watch the video? Did you miss the part where SW was a leader and innovator for 30 years, then sat back and did the bare minimum, while their own people warned them of issues that needed to be addressed but no action was taken?

[@aszhara2900]

"Activists are the lowest form of human life. They do the same thing politicians do, but for free." I'm still conflicted whether to put activist investors below or above average activists.

[@Marinealver]

Southwest is now regretting painting "Proudly All Boeing" on their planes.

[@judymacek]

You heard it here first. As some have said- goodbye customer service- stranded passengers will never speak to a real person again, your baggage fees will cost as much as your ticket, if you try to take an earlier flight it'll cost hundreds in ticket change fees, and finally your knees will be in your chest as the seat pitch and seat count will change on every aircraft. Additionally expect a regional carrier to be subcontracted as the new management tries to whipsaw labor rates with the mainline employees; thought you were flying Southwest? Think again. The remaining board members are a collective of 'slash and burners'. Ask me how I know.

[@user-cn8wu2ok5s]

Activist investors will destroy this company just like all of the others they have gone after

[@Ficon]

The core of SW meltdown was local managers causing ground handlers in Denver to walk off the job.

[@AbuPaul]

I'm a strong believer and supporter of Southwest. I only fly with them, mainly because of their friendly and unique ways of doing the airline business. Both you Pieter and Elliott are wrong about SWA. There are no planes flying with empty seats, and neither the change of policy to be "like the other guys" is going to be welcome by the customers. Is this Elliott the same one that bought Sears, merged it with Kmart, sold their massive real estate portfolio, then shut them both down?

[@TiaKatt]

I think that was Lampert's, ESL Investments. But Elliot Investments *did* ruin Cabela's and Barnes and Noble.

[@wilsonlaidlaw]

One other point would be for South West to stop putting all their eggs in a Boeing basket, which might have alleviated their elderly aircraft/aircraft sizing issues. I recognise that with Airbus' very full order book this would have to be a very long term strategy but with 737 production currently at a total standstill, it might be time to look to the future and diversify. Could they also become the launch customer for an Embraer 737 Max 7 competitor.

[@ericmintz8305]

Buying Boeing was a winning strategy when Boeing made good planes. The commonalities lowered the required spare parts inventory, reduced the need for special purpose tools, and simplified mechanics' training. Very few foresaw how fast and far Boeing would fall?

[@ds78613]

Airbus is having delivery issues too. If Airbus was the answer, Spirit would be doing great and Allegiant wouldn't be buying Boeing in addition to Airbus.

[@weing]

@@ericmintz8305 Actually everyone on the Shop floor at Boeing knew the fall was coming as soon as the decision was made to move the C-suite to Chicago in 2001. It was such a strong company it took 20 years for this to bring on this end but bring it on it did.

[@fastmph]

Once bag fees are introduced, LUV becomes just another also-ran.

[@onedaya_martian1238]

Yet another great presentation Mentour Team !! It has to be said that 3 of SWA's "draws" to buying a seat are: low fares, unassigned seating, free luggage. It sets them apart ! The expected added revenue Elliot's "elite" financial folks forecast will very likely be offset by much lower loyalty. I have "premiere" status on SWA, but my company's website is putting me on Delta flights now because of price. When SWA matches Delta's (and other's) offerings for seats and luggage, plus starts paying for a better backoffice computer system for flight management and financing the new planes, the competition between carriers will be a race to the bottom with little upside to share price. Elliot Investment's quants will make money the same way "McDonald Douglas financiers" did, but with the same type of losses of quality and reputation that Boeing is experiencing. More red-eye's for dividends anyone, right Mentour ?

[@skyra1der]

I was wearing my "This is How I Roll" t-shirt last weekend and someone complimented me on it!!

[@Starship007]

Legacy airlines have to bailed out several times, too big to fail. Unfair to competing airlines.

[@johnmckeon4498]

I think a large portion of their customer base including myself would be uninterested in flying on Southwest if they go for the assigned seating. And especially if they take away free bags.

[@The_ZeroLine]

Before long, there will be crowdfunded activist investors and takeovers using a single account as a proxy. I’m surprised it hasn’t been done yet. The GameStop thing was just a precursor.

[@kdawson020279]

I've always been worried about that. There are instances where the right group of people with money could pull it off, but a bunch of sock puppets could create some really interesting multinational ownership issues depending on how they're distributed.

[@mrvwbug4423]

crowdfunding investments to get controlling shares could be interesting, though it depends on the aims of whoever is running the scheme, could also be a colossal scam, there would need to be a mechanism where the crowdfunding investors are ensured that they get a piece of the profits.

[@kdawson020279]

@@mrvwbug4423 I think you should be able to launch a company with crowdfunding; you probably shouldn't be able to negotiate a corporate buyout with kitchen table investors without some sanity checks and legal scrutiny. It's a bit of a scary concept, as a popular enough Kickstarter could threaten smaller companies' market standing not based on the merits of the product/services of the company, but on the chaos of distributed ownership.

[@noname2490]

The problem with Elliot is what they do to companies that they take control of. What they did to Cabellas and especially they employees is terrible. And they will do the same to Southwest

[@AeroMaize]

Southwest isn’t a LCC, it’s a hybrid. The reason for the higher operating costs was because of the massive hiring the past few years in prep for more planes hitting the line…. that never came. Had Boeing delivered you would be talking about how SWA took market share from legacy airlines.

[@ci7alex1]

People from retail will never understand how airlines operate and what makes them tick. It's not a business with any profit margin.

[@RainbowLovingRainbow]

Have you seen all the ticket price increases and other fees that the top US airlines also did during this period? Southwest is the only airline that still has reasonable prices and better yet: 2 free bags. Elliot just wants them to be a "true" low cost airline to nickel and dime the customers for everything. If they did that they’d lose all their goodwill with their customers.

[@hellohello-g8w]

Gotta love how Boeing keeps finding a way to play a major role in all these aviation problems

[@arnaudgerard1971]

I wonder - if shareholder value really triggers innovation.

[@MikeHarris1984]

I worked for a fortune 500 financial company for over 16 years and they were a massive inovator in the early years. First websites for stock trading, first to invest in data centers and big data analytics, and lots of other features and is now the largest financial firm by holdings (many Trillions of $$$$$) and they got stale in the past decade. They are trying to make changes, but instead of innovating, they push for M&A and buy other technologies and slap their name on it. Leadership for stale and complacent and are quickly falling behind with the fin tech startups. Where they are trying to use their size to force industry change that startups can compete with (pricing schedules) or buy them outright. Southwest is doing the same.

[@AleksLazar]

“Everyone else is doing it” is not always a good business strategy. Maybe having more cheap seating instead of fewer more expensive seats has it’s own advantages, route usage flexibility, simpler operations, whatever.

[@TMG2rfj]

We should all have learned by now from the Boeing example, that the “greed model, “which is short-term profit-focused, doesn’t work. We as a society need a culture shift away from the MBA-maximize stock value focus above all else to long-term robustness/stability and social responsibility…

[@VanillaMacaron551]

They used to teach them about the "triple bottom line".