It's SouthwestUS airlines stocks are up 5%-10% this morning.
Dow Jones : Southwest lift revenues forecasts , plans buybacks
A new Southwest Airlines is taking shape.
The budget travel pioneer is doing away with some hallmarks of the simple, no-frills model that made it an industry icon, as it fends off an activist investor and tries to convince shareholders that its executives can pull off a financial turnaround.
Southwest next year will begin selling tickets that include assigned seats. And for the first time in over 50 years of flying, some seats will be better than others, for passengers who are willing to pay for a couple inches of extra legroom.
"We're now ushering in a new era at Southwest, moving swiftly and deliberately to transform the company," Chief Executive Bob Jordan said.
The airline unveiled details of its plan ahead of an investor day Thursday, along with other shareholder-friendly measures like a $2.5 billion share buyback program, plans to cut costs and boost efficiency, and a new board member. Altogether, the airline says its plan will bring in an additional $4 billion in earnings before interest and taxes by 2027.
It also said that its third-quarter sales were better than expected, citing improving demand as well as a benefit from the CrowdStrike outage that hobbled rivals.
Southwest shares jumped about 9% in early morning trading.
Control of the company hangs in the balance. Elliott Investment Management, which has said the airline has failed to adapt its business model and fallen behind rivals, owns about 10% of Southwest shares. It is angling to oust CEO Jordan and replace the airline's board with new directors who will re-evaluate its strategy.