On August 13, Elliott Investment Management, which has about 11 percent economic interest in Southwest Airlines, proposed an overhaul of the airline¡¯s Board of Directors to improve its performance and standing, prompting the airline to respond to the motion on August 14.?

Elliott proposed to replace a majority of Southwest Airlines¡¯ Board of Directors with ten qualified former airline CEOs and other experts in fields like hospitality, labor relations and technology.?

¡°The strong qualifications of these Candidates stand in contrast to those of the current Board, which prior to Elliott's June 10 letter lacked a single independent director with airline experience, and which continues to lack relevant experience in other key areas necessary to drive Southwest's evolution,¡± said Elliott in the news release on the proposed overhaul.?

This isn¡¯t the first time the investment management corporation is proposing ambitious changes to the running of Southwest. On June 10, it released a proposal calling for an overhaul of the Board of Directors and a replacement of the CEO, Bob Jordan, under whose leadership Elliott called the airline¡¯s performance ¡°unacceptable.¡± Their proposal, called Stronger Southwest, is available to view online.?

Today, Southwest Airlines published this letter in response to the new proposal:?

¡°Since Elliott launched its campaign against Southwest Airlines, the Board has consistently sought to engage constructively and in the best interests of all Shareholders. Elliott has dismissed those efforts at every turn. After Elliott recently agreed to a meeting with Southwest Airlines in early September to discuss a collaborative resolution, including continuing significant Board refreshment and other governance enhancements, Elliott unilaterally decided instead to publicly announce its intention to replace a majority of Southwest Airlines' Board.

¡°The Southwest Airlines Board and Executive Leadership Team remain open to conversations with Elliott to discuss ideas to drive Shareholder value, and the Board will evaluate Elliott's proposed nominees as part of its ongoing Board refreshment process. No immediate action is required of Shareholders.?

¡°Southwest Airlines is laser-focused on restoring its industry-leading financial performance and on building a sustainable and profitable future for the airline and all of its Shareholders. The airline recently announced several initiatives to elevate the Customer Experience, improve financial performance, and drive Shareholder value. Southwest Airlines will provide additional details on a comprehensive plan to transform its business, improve operational efficiency, and deliver capital allocation discipline during its Investor Day in late September.

¡°Southwest Airlines is committed to maintaining a strong, independent Board with the right mix of skills and experience. The Board's Nominating and Corporate Governance Committee has taken deliberate actions to bolster the Board's existing expertise with professionals who offer a diverse range of skills that are critical to the airline's business and ongoing transformation. As part of its continued refreshment efforts, the Board has appointed a total of eight new independent and highly qualified Directors over the last three years, including the recent addition of experienced airline executive and entrepreneur Rakesh Gangwal.

¡°The Southwest Airlines Board remains confident that the airline has the right Leadership Team in place to evolve the business and to lead Southwest Airlines forward.¡±

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