Dallas, Texas, February 5, 2026
Elliott Investment Management has decreased its stake in Southwest Airlines, selling over 4 million shares. The reduction brings their ownership to approximately 9%. Despite this, Elliott remains confident in Southwest’s strategic direction and continues to support its initiatives for profitability and shareholder value.
Dallas, Texas – Activist Investor Elliott Investment Management Reduces Stake in Southwest Airlines
Dallas, Texas – Elliott Investment Management, an activist hedge fund, has decreased its ownership in Southwest Airlines, selling over 4 million shares between December 2025 and January 2026. This reduction brings their stake down to approximately 9% of Southwest’s outstanding shares. The firm stated that this decision was made for portfolio management purposes.
Background on Elliott’s Involvement with Southwest Airlines
In June 2024, Elliott Investment Management acquired a significant stake in Southwest Airlines, estimated at around 10% to 11%, representing an investment of approximately $1.9 billion. This move positioned Elliott as one of the airline’s largest shareholders and initiated a period of active engagement aimed at driving changes in leadership and business strategy.
In October 2024, Southwest Airlines agreed to appoint six new directors to its board, and its Chairman Gary Kelly retired several months earlier than expected, following pressure from Elliott Investment Management.
Recent Developments
Despite reducing its direct ownership stake, Elliott Investment Management has expressed confidence in Southwest Airlines’ strategic direction. The firm continues to hold a significant economic exposure to the airline through cash-settled swaps and related option contracts. Elliott has indicated its intention to remain a significant shareholder, citing confidence in Southwest’s ongoing strategic initiatives and potential for improved profitability and shareholder value.
Southwest Airlines’ Response
Southwest Airlines has acknowledged the changes in its shareholder base and continues to implement strategic initiatives aimed at enhancing operational performance and shareholder value. The airline remains focused on its long-term goals and is committed to delivering value to its shareholders.
Conclusion
Elliott Investment Management’s decision to reduce its stake in Southwest Airlines reflects its ongoing portfolio management strategies. While the firm has decreased its direct ownership, it maintains a significant economic interest in the airline and continues to support Southwest’s strategic initiatives.
FAQ
What percentage of Southwest Airlines (LUV) shares does Elliott currently report owning?
Elliott Investment Management reports beneficial ownership of 46,600,000 Southwest Airlines shares, representing 9.0% of the common stock. This percentage is calculated using 517,155,080 shares outstanding as of October 22, 2025, as disclosed in Southwest’s Form 10-Q.
How much has Elliott Investment Management invested in Southwest Airlines (LUV) shares?
The Elliott funds’ directly held Southwest Airlines common shares have an aggregate purchase cost of approximately $1,260,708,046. This figure reflects the total cost of acquiring the shares reported as beneficially owned, separate from Elliott’s additional derivatives-based economic exposure.
What is Elliott’s total economic exposure to Southwest Airlines (LUV), including derivatives?
Elliott reports combined economic exposure to Southwest Airlines of approximately 10.7% of the outstanding common stock. This includes its 9.0% beneficial share ownership plus additional exposure through cash-settled swaps and related option contracts referencing Southwest shares.
Why did Elliott reduce its economic exposure to Southwest Airlines (LUV)?
Elliott states it reduced the Elliott funds’ economic exposure to Southwest Airlines for portfolio management purposes. Despite trimming exposure, Elliott says it intends for the funds to remain significant shareholders, citing confidence in Southwest’s strategic initiatives and potential for improved profitability and shareholder value.
Does Elliott intend to remain an active shareholder in Southwest Airlines (LUV)?
Yes. Elliott explicitly notes it intends for the Elliott funds to remain significant shareholders of Southwest Airlines. The firm ties this stance to its confidence that Southwest’s ongoing strategic initiatives will lead to greater profitability, accretive capital allocation, and shareholder value creation.
Key Features
| Feature | Details |
|---|---|
| Initial Stake | Approximately 10% to 11% of Southwest Airlines, representing an investment of about $1.9 billion. |
| Recent Reduction | Sold over 4 million shares between December 2025 and January 2026, reducing stake to 9%. |
| Current Economic Exposure | Approximately 10.7% of Southwest Airlines, including direct ownership and derivatives. |
| Strategic Initiatives | Continued support for Southwest’s strategic initiatives aimed at improving profitability and shareholder value. |
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