October 25th

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October 25th

Southwest Airlines: Board restructuring after conflict with Elliott Investment Management

Southwest Airlines, one of the largest low-cost airlines in the United States, is facing a far-reaching redesign of its board of directors. This development is the result of a months-long conflict with activist investor Elliott Investment Management, which has now been settled by an agreement. Elliott, known for his aggressive investment strategies, had strongly criticized Southwest's corporate governance and demanded decisive changes to the board to improve the airline's operational and financial performance. This agreement marks a turning point in Southwest's leadership and sets the course for a new strategic direction. Background to the conflict: Elliott Investment Management's demands In the summer of 2024, Elliott Investment Management began to build a significant stake in Southwest Airlines and shortly thereafter publicly expressed harsh criticism of the company's leadership. The main targets of the criticism were CEO Bob Jordan and several of the company's directors, who Elliott said were blamed for stagnant performance and poor corporate governance. Elliott, led by John Pike and portfolio manager Bobby Xu, demanded the removal of eight of the then directors and the appointment of its own list of eight new candidates to the board. A particular focus was the demand for a special meeting of shareholders to vote on these changes. Elliott argued that only through comprehensive changes in the board and at the top of the company would Southwest be able to create long-term sustainable shareholder value and improve operating performance. Southwest, on the other hand, described Elliott's demands as "unnecessary and inappropriate". In an official statement, the company stated that Elliott "persistently demands control of the board".

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BGH decision against Lufthansa: Provisional victory for Condor

The dispute between Condor and Lufthansa, which has been going on for years, over the conditions for feeder flights to long-haul flights operated by the holiday airline Condor has taken a new turn. The Federal Court of Justice (BGH) recently ruled that the previous agreement between the two airlines will remain in place until further notice. This decision brings temporary clarity to a conflict that has been simmering since the Corona pandemic in 2020 and has severely strained the relationship between the two German airlines. A years-long legal dispute over feeder flights The conflict began in late 2020, when Lufthansa terminated its cooperation with Condor in order to focus more on its own subsidiary Discover Airlines, which was to take over the holiday flight business. Condor, a former subsidiary of Lufthansa, was dependent on the larger airline to operate feeder flights from numerous European cities for its long-haul flights to Frankfurt. Condor mainly offers holiday flights to destinations worldwide, while Frankfurt serves as the main hub for the holiday airline. The termination of the feeder cooperation by Lufthansa meant that Condor suddenly had to deal with higher costs and organizational challenges, which could lead to a significant competitive disadvantage. Lufthansa insisted that Condor would have to accept the same, less favorable conditions that apply to other Lufthansa cooperation partners. Condor, on the other hand, relied on the particularly advantageous conditions that dated back to the time when it was part of the Lufthansa Group. These conditions secured Condor cheap feeder flights from Lufthansa, which was a crucial basis for the company to plan its long-haul flights. The path through the courts After the termination of the agreement in 2021, Condor moved

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