will complete a significant shakeup of its board of directors in April with two more members stepping down, continuing the restructuring process that began last summer. Elaine Mendoza and Eduardo F. Conrado, who joined Southwest’s board in 2023, are not seeking reelection and are expected to step down after the company’s 2025 annual meeting on April 25.
Southwest Airlines said in a filing with the US Securities and Exchange Commission (SEC) that Conrado and Mendoza’s departures were not the result of any conflicts with the company. “Mr. Conrado’s and Ms. Mendoza’s departures are not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices,” the company stated.
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Two directors to step down as part of restructuring
Their exit will be the last phase of a transformation that began when Elliott Investment Management, an activist investor, expressed dissatisfaction with the airline’s leadership, according to The Dallas Morning News. The resignations of Conrado and Mendoza are consistent with a deal that Elliott and Southwest’s leadership reached in October 2024. The hedge fund was given control over Southwest’s corporate structure after criticizing the airline for what it saw as poor leadership. As per this agreement, Elliott will select five of the new directors, reducing the airline’s board from 15 to 13 by the annual meeting in April.
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According to the article, Conrado, an experienced executive, is the president of Ascension, one of the largest nonprofit health organizations in the United States. Additionally, he has held executive roles at ArcBest Corp. and Motorola Solutions. Mendoza founded Conceptual Mindworks, a private sector software and medical informatics development business, and serves as its CEO. Both directors were in the first group of board members appointed when Bob Jordan took over as CEO in place of Gary Kelly, marking a new chapter for the airline.
Additionally, two long-time executives have left Southwest in addition to the board changes. According to the ABC Dallas station, the airline’s Chief Financial Officer (CFO), Tammy Romo, and Chief Administration Officer (CAO), Linda Rutherford, both announced their retirements, which will take effect on April 1, 2025. Alongside Conrado and Mendoza’s departure from the airline, Romo and Rutherford, who have worked for Southwest for more than thirty years, will also be leaving the company.
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Elliott Investment Management’s influence
Last year, Elliott Investment Management acquired a $1.9 billion stake in Southwest Airlines, becoming one of its largest investors. The move to reduce the board is part of a broader effort to address concerns raised by Elliott. The hedge fund had argued that the airline had been poorly run in the years before its takeover and had pushed for reforms to enhance its operations.
Simple Flying previously reported that amid a dispute with Elliott Investment Management, Gary Kelly, the former CEO and executive chairman of Southwest, also said in September that he would retire early. Kelly was replaced by Rakesh Gangwal, the multibillionaire co-founder of indigo
, the biggest airline in India.
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Financial performance remains strong
Even with these changes in leadership, Southwest Airlines is still financially stable. Despite the difficulties of a competitive business, the airline just announced an annual profit of $465 million in January, indicating a robust financial performance. Additionally, the business made a record $27.5 billion in sales throughout the year. These findings show that despite the substantial managerial and board reorganizations, Southwest has continued to run its business well.
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Additionally, Southwest Airlines said that their full-year capacity increased 4.1% in 2024 as Boeing delivered 22 Boeing 737 MAX 8
aircraft, two more than it had anticipated. The airline now projects that it will get 38 737 MAX 8s in 2025, which is much less than the number of orders it has contractually committed to.
All eyes will be on how these changes will affect the company’s future direction, especially in an increasingly complicated and competitive airline sector, as the airline’s leadership has now changed in reaction to Elliott’s influence.
