02:45 PM EDT, 07/08/2024 (MT Newswires) -- Southwest Airlines ( LUV ) investor Elliott Investment Management said Monday it plans to give shareholders "a direct say" on its proposed leadership changes at the budget carrier if it doesn't cooperate with the activist shareholder.

Last month, Elliott disclosed a roughly 11% economic interest in Southwest ( LUV ) and called for new leadership at the company alongside a broad review of the business. In a letter sent Monday to Southwest's ( LUV ) board, Elliott said its recent engagements with shareholders and other stakeholders have been fruitful.

"The feedback has been overwhelmingly consistent with our perspective that the company's performance is unacceptable and that leadership change is required to return Southwest ( LUV ) to its once-leading position in the industry," Elliott said in the Monday letter. The investor said it's open to collaborating with Southwest's ( LUV ) board on the proposed changes. However, "absent alignment, we intend to move expeditiously to give shareholders a direct say on the necessary leadership changes."

Elliott said it's not seeking control of the company, days after the airline adopted a shareholder rights plan, more commonly known as a "poison pill." Elliott said Monday it was meant to prevent the shareholder from growing its stake in the company above 12.5%.

Southwest's ( LUV ) lowered second-quarter unit revenue outlook continued the company's "disappointing trend of industry-lagging revenue performance" and marked the eighth guidance cut in the past 18 months, the activist investor wrote.

On Monday, Southwest ( LUV ) said it appointed Rakesh Gangwal as a board member. Elliott said Gangwal was "handpicked" by the carrier. "These actions -- and in particular the adoption of the 'poison pill' -- demonstrate how profoundly out of touch Southwest's ( LUV ) board has become with shareholder sentiment and with the reality of the situation," the investor wrote.

"Given the long record of falling short and the deep loss of confidence in Southwest's ( LUV ) leadership among shareholders and other constituents, it is simply untenable for the same board and management team to continue to lead Southwest ( LUV )," Elliott said.

Southwest ( LUV ) didn't respond to MT Newswires' request for comment.

Elliott said it has identified numerous former airline executives and other industry leaders with relevant experience who are "eager to serve" on the Southwest ( LUV ) board. The investor said the executive chairman role at Southwest ( LUV ) should be retired and the company should appoint an independent chair from outside. Elliott urged the carrier to immediately announce a chief executive transition and select an interim CEO "who can earn the trust of investors," according to the letter.

"Following a board refresh and the appointment of a highly qualified and credible new CEO, Southwest ( LUV ) would be well positioned to develop and execute a new strategy to restore the airline to industry-leading performance," the investor wrote.

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