Elliott Investment Management still wants to replace Southwest Airlines CEO Bob Jordan, according to a union official, suggesting changes the carrier has already promised aren’t enough to satisfy the activist shareholder. In a Sept. 12 meeting with the Aircraft Mechanics Fraternal Association, Elliott laid out a vision of Southwest without Jordan as its leader, union National President Bret Oestreich said in a memo to members. The investment firm, which is seeking a shakeup after acquiring a 10% stake in the carrier, also wants Southwest Chairman Gary Kelly to exit sooner than his planned retirement next year. Southwest didn’t immediately respond to a request for comment. Its board has stood by Jordan after prior calls by Elliott for his ouster. The investor, which disclosed a $1.9b stake in the carrier in June, declined to comment. The exchange with the union shows that tensions aren’t easing between the investor and the airline, after Elliott criticized Southwest for what it called a stubborn refusal to modernize operations. The lack of change has cost the carrier some passengers and hurt investors with a lagging share value, Elliott has said. In addition to calling for the departure of the top executives, the activist has named 10 potential new board members for Southwest. Elliott was “clear that its vision of a Southwest turnaround is one where Robert Jordan does not remain as CEO and, if Elliott can assert enough board influence, other top executives would also, most likely, be replaced,” Oestreich said in the Sept. 16 letter. AMFA represents more than 3,200 mechanics and other workers at Dallas-based Southwest. The meeting came days after Southwest revealed sweeping changes to its board, with Kelly planning to step down and six other directors departing this year. Those moves, Elliott told the union group, weren’t part of a negotiated deal between the two sides. <br/>
unaligned
Ryanair has seen better momentum in bookings since last month and less need to cut prices, CEO Michael O'Leary told Reuters on Tuesday, adding that annual profit was likely to be slightly down on last year but remained "very strong". His comments provided reassurance after a tough few months for the industry. Shares in Ryanair spiked higher, also giving a boost to rival European airline groups including easyJet, IAG, the owner of British Airways, Air France-KLM and Lufthansa. "We think we are past the worst of the 'fare scare' which hit European airlines this summer, given the upward trend in European macro indicators," said RBC analyst Ruairi Cullinane. Other smaller European airlines have reported either slower price growth or flat ticket prices as the post-pandemic travel boom settled into something more akin to regular demand. Ryanair shares slumped in July after it reported ticket prices had seen annual falls of 15% in the three months to the end of June, heightening fears of a weak summer for Europe's airlines. Prices will likely be down 5-9% in the three months to the end of September from the same period last year, O'Leary said, with signs of improvement in recent weeks. "We were having to discount heavily to hit our load factor objectives. I think, from about August onwards... there's a better momentum of bookings, we're having to discount less," O'Leary said, adding that smaller discounts are expected until November.<br/>
The Commerce Commission is filing charges against Jetstar, alleging it misled consumers about their rights to compensation when the airline cancelled or delayed flights within its control. The charges, under the Fair Trading Act, relate to Jetstar’s alleged communications following delayed or cancelled flights, which likely discouraged consumers from seeking compensation they were entitled to, and that Jetstar likely denied legitimate claims. The commission began investigating the airline in 2022 and, in the commission’s opinion, Jetstar likely made false or misleading statements to consumers about their rights in aviation law, in 2022 and 2023. Commission general manager competition, fair trading and credit, Vanessa Horne, said airlines had a responsibility to not mislead consumers about their rights in the event of cancellations or delays. “The Civil Aviation Act is clear that airlines have a responsibility to reimburse customers for loss caused by cancellations or delays on New Zealand domestic flights that are within the airline’s control. This likely includes delays or cancellations that are due to staffing or mechanical issues.”<br/>
US aviation company Jet Midwest has launched legal proceedings against Rex - Regional Express in the New South Wales Supreme Court in Sydney, alleging that it stripped its aircraft for parts and sold the remaining airframes for scrap without paying for them, according to the Australian Financial Review. The matter, Jet Midwest, Inc. v Regional Express Holdings Limited trading as Regional Express Airlines (case no: 2024/00264848), was mentioned before Justice James Stevenson during a directions hearing on September 13. Jet Midwest, a Kansas-based aircraft MRO that sells, leases, and exchanges aircraft, engines, and their components, says in its court filing that in 2019 it sold Rex four Saab (Sweden) turboprops stored at Kingman Airport for US$2m, against which Rex paid a USD200,000 deposit. Citing Covid-19 related financial constraints, Rex requested an extension of payment timelines. But by June 2020, with no more funds forthcoming, Jet Midwest declared the contract void. Despite this, Jet Midwest alleges Rex retained a third party to remove the engines and propellers around October 2020 and scrap the airframes, with the assets and funds from scrapping later handed over to Rex. Jet Midwest is asking the court to award it USD7.2 million plus legal costs. Contacted by ch-aviation, Jet Midwest declined to comment on the matter.<br/>