Southwest Airlines Stock Dives Amid Governance Shake-Up

Southwest Airlines (LUV -3.54%) saw its shares plummet nearly 4% on Friday, sharply underperforming the broader market's 1.6% decline. The sell-off followed Thursday's after-hours announcement of Chair Rakesh Gangwal's abrupt resignation, effective immediately. Board member Doug Brooks will assume the role as the airline forms a new fleet oversight committee under Gangwal's continued involvement.

The leadership transition comes as activist investor Elliott Management pressures the struggling discount carrier for strategic changes. Southwest's stock has languished amid intensifying competition in the budget flight sector, with Elliott acquiring a stake in mid-2024 and pushing for board and management restructuring. Gangwal cited external time commitments as the reason for stepping down from the chair position while retaining director duties.