Southwest Airlines Co (NYSE:LUV) shares are trading higher Tuesday. The company issued a response to Elliott Investment Management's call for a special meeting of shareholders.

What To Know: After the market close on Monday, Southwest confirmed that activist Elliott Investment Management requested a special meeting of shareholders to consider its proposals including the nomination of eight directors to the airline's board.

"Elliott's Special Meeting request is unnecessary and inappropriate considering the extreme nature of Elliott's demands. The timing of Elliott's request to apparently pursue Board control appears designed to maximize disruption of Southwest's execution of its important business transformation underway as we approach one of the busiest travel periods of the year," the company said in a statement.

Southwest noted that its board has held "extensive dialogue" with several Southwest shareholders. The company said the "resounding preference" of shareholders is that Southwest engage with Elliott and seek to avoid a protracted dispute.

Southwest's board said it has made every effort to reach a constructive resolution, including offering to interview and appoint up to three of Elliott's board candidates to a reconstituted board. The company also noted that Elliott's latest framework for settlement shows the activist's continued interest in seeking effective control of the board and management.

Southwest's board said it will review Elliott's request and discuss the process for setting a special meeting with the activist in a constructive manner. In the meantime, Southwest said it will continue to move expeditiously to transform its business, improve financial performance and make meaningful board and corporate governance changes.

Elliott disclosed a roughly $2 billion stake in Southwest in June and has since made several attempts to persuade Southwest to implement what it sees as necessary governance changes. The activist recently said it maintains an 11% stake in the airline company.

Last month, Southwest introduced its "Southwest. Even Better" transformational plan at its Investor Day. The three-year plan is focused on transforming the customer experience to drive revenue growth and improve profitability. Elliott believes the plan will not work without a management refresh.

Elliot on Tuesday launched a new podcast series that will feature conversations with all of the activist's director nominees for Southwest's board.

LUV Price Action: Southwest Airline shares were up 1.94% at $30.96 at the time of publication Tuesday, according to Benzinga Pro.

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