July 8 (Reuters) - Activist investor Elliott Investment

Management on Monday warned of a proxy fight to push for

leadership changes at U.S. budget carrier Southwest Airlines ( LUV )

.

In a letter to Southwest's ( LUV ) board, Elliott said while it is

open to collaboration, it plans to "move expeditiously to give

shareholders a direct say on the necessary leadership changes."

Southwest ( LUV ) did not immediately respond to a request for

comments.

Elliott, known for pushing changes to boost shareholder

returns, has called for a reconstitution of Southwest's ( LUV ) board

with "new, truly independent" directors possessing expertise in

airlines, customer experience and technology.

The activist investor has also called for a leadership

change citing Southwest's ( LUV ) disappointing financial results.

In its letter, Elliott reiterated those demands, saying

Southwest's ( LUV ) leadership has lost the trust of its shareholders.

Elliott currently owns an 11% stake in the company, making

it one of the largest investors.

Last week, Southwest ( LUV ) said the activist investor had made

filings with antitrust authorities that would allow it to

acquire an even larger voting power as early as July 11. It

prompted the company to adopt a "poison pill", used by corporate

boards to thwart hostile takeover bids, to deter Elliott from

raising its stake.

Elliott said it is not seeking control of Southwest ( LUV ), but

added the airline's board has put its own "self-interest ahead

of the company's" by adopting the "poison pill."

It also criticized the appointment of aviation industry

veteran Rakesh Gangwal to Southwest's ( LUV ) board, calling it an

attempt on the part of the board to "entrench itself and the

current management team."

"These actions...demonstrate how profoundly out of touch

Southwest's ( LUV ) board has become with shareholder sentiment and with

the reality of the situation," Elliott said in its letter.

Gangwal - who co-founded InterGlobe Aviation, the

operator of India's largest airline IndiGo - has also served on

the boards of US Airways Group, CarMax ( KMX ) and Office Depot,

among others.

"Rakesh's expertise in travel technology will be valuable as

we continue to make investments that support our operations and

strategic initiatives," said Gary Kelly, executive chairman of

Southwest's ( LUV ) board.

(Reporting by Rajesh Kumar Singh in Chicago and Shivansh Tiwary

in Bengaluru; Editing by Shilpi Majumdar and Anil D'Silva)