Robert ‘Bob’ Jordan, Gary Kelly, and Rakesh Gangwal, respectively the chief executive, executive chairman, and board director member of Southwest Airlines (WN, Dallas Love Field), have bought over 3.7 million shares in the Texan budget carrier, SEC filings have shown.
Rakesh Gangwal, who is also the co-founder and owner of India's IndiGo Airlines (6E, Delhi International), bought nearly 3.6 million shares followed by Jordan who bought 97,872 shares for USD29.63 per share via his retirement savings plans, and Kelly who moved 84,212 shares from a family limited partnership to a family trust while directly acquiring 33,921 shares for an average price of USD29.51.
Despite Gangwal’s acquisition being worth over USD100 million, he still only holds less than 1% of Southwest’s stock. According to the airline itself, it has issued nearly 600 million shares. Activist investor Elliott Management holds a stake of approximately 11% in Southwest, worth around USD1.9 billion.
Southwest named Gangwal a member of the board in July amid pressure from Elliott to oust the airline’s management, including CEO Bob Jordan, and force changes in both its management and business model. The fund has repeatedly said that Southwest represents the "most compelling airline turnaround opportunity in the last two decades."
In September, Kelly announced he would step down, while six other directors will retire from the 15-member board. Changes to its business model include assigned seating, extra legroom seats, changes to the boarding process, red-eye flights, and partnerships with international carriers (Icelandair is becoming the carrier's first partner). Bob Jordan, however, will remain at the helm of the carrier.
Gangwal told Reuters that more changes at the C-level would hurt shareholders. “I believe changing the board structure and top leadership beyond what has been already announced, would be counterproductive and not in the best interest of shareholders,” he said.
