Oct 23 (Reuters) - Elliott Investment Management and

Southwest Airlines ( LUV ) are close to reaching a settlement

agreement that would avert a proxy battle over control of the

airline's board, Bloomberg News reported on Wednesday, citing

people familiar with the matter.

The parties are negotiating a deal that would grant the

activist investor several board seats but fewer than a majority,

the report said, adding that a settlement could be announced as

soon as Thursday.