Zhitong Finance and Economics learned that Bob Jordan, CEO of Southwest Airlines (LUV.US), said on Wednesday that the company is considering changing its open seat policy and other potential changes in response to pressure from Elliott Management Corp., the company's fund investors. Furthermore, despite pressure from shareholders, Jordan said he will not resign.

Activist investor Elliott Investment Management has accumulated nearly $2 billion worth of shares in Southwest Airlines and plans to push for changes at the company. Elliott is expected to make contact with Southwest's management team, according to sources familiar with the situation on Monday. The exact details of Elliott's plan are not yet clear. The well-known activist investor is said to be one of the airline's largest investors.

Jefferies Financial analyst Sheila Kahyaoglu stressed that Elliott Management's recent focus has been on leadership, putting an outsider who is willing to change the status quo in place of CEO Bob Jordan and establishing a new independent board of directors. She said this will facilitate a value-enhancing, comprehensive business review that focuses on some quick-hitting items like checked-bag fees, paid seat selection, and potential premium seating. The company believes that comprehensive turnaround is more long-term and structural.

Jordan said, "We want to know what their ideas are, they may have great ideas. Ultimately, we will treat Elliott like any other investor. We will sit down and listen to them... Southwest Airlines is a great company. We have a great plan, and we will execute it. I have no plans to resign."

On Monday, Elliott called for changes in the leadership and board of directors of Southwest Airlines, saying that the company needs a new perspective to compete in the modern aviation industry. Previously, Elliott announced that it holds shares in Southwest Airlines worth approximately US$1.9 billion.

Jordan also said that Southwest Airlines originally expected to receive 80 aircraft from Boeing (BA.US) this year, but now expects to only receive 20 and is expected to begin using the smaller MAX 7 in 2026, which is still awaiting certification. Jordan said, "We support Boeing to do better... because a better Boeing is good for us for decades. We need Boeing to be very strong. I am not satisfied with the delay."

Jordan will meet with the head of the Federal Aviation Administration later on Wednesday to discuss Boeing's issues. Last Friday, he visited Boeing supplier Spirit AeroSystems (SPR.US), where many quality issues arose, and plans to visit Boeing again within two weeks.

Jordan said Elliott's plans for proposed changes are "quite mild." He added that he heard Elliott may propose a baggage fee plan, but Southwest Airlines said its customer data shows that nearly 50% of customers choose the airline because of its no baggage fee policy. Jordan said, "You have to be very knowledgeable before you make changes to Southwest Airlines' business model. Elliott is not directing the company."

Jordan told reporters that Southwest Airlines will not stand still and reiterated that it is considering changing its open seat policy and may add premium seats or extra legroom seats.

Jordan said, "If customer preferences tell us that we need to develop, we will develop. You can't be stubborn about change. At the same time, we will stick to our values, and our values ​​will say, 'We treat others well. We have the best policies, the best people, and we operate well.' -- Everything else can be put on the table." Jordan said that Southwest Airlines plans to announce a "very extensive plan" at its investor day in September.