Rakesh Gangwal, co-founder of India's largest airline IndiGo, has been appointed to the board of directors of Southwest Airlines. The move comes as Southwest faces pressure from activist investor Elliott Management, which has called for a leadership shakeup and a board refresh.
Gangwal brings a wealth of experience to the table. He was instrumental in establishing IndiGo as a major force in the Indian aviation market, and previously served as CEO of US Airways during the 1990s and early 2000s. His expertise in airline operations, strategy, and low-cost carrier business models is expected to be a valuable asset to Southwest.
"I am delighted to welcome Rakesh to our board, " said Gary Kelly, Executive Chairman of the Board at Southwest Airlines. "His decades of experience as an executive and entrepreneur in the airline industry will be a major asset to Southwest. Rakesh's understanding of the importance of building a strong company culture while maintaining profitability aligns perfectly with our core values. "
Gangwal's appointment is seen as a strategic move by Southwest to bolster its board with industry expertise in the face of Elliott Management's campaign. The activist investor has been critical of Southwest's recent financial performance and has called for changes to boost shareholder returns. One of Elliott's demands was the addition of new, independent directors with airline experience to the Southwest board. Gangwal's appointment fulfills that specific request.
"I have long admired Southwest Airlines and am honored to join the board, " said Gangwal. "I look forward to supporting the company's strategic direction and contributing to its continued success. "
Analysts believe that Gangwal's experience with low-cost carriers, particularly his role in building IndiGo, could be particularly helpful to Southwest. Both airlines share a similar business model, focusing on point-to-point service and a strong emphasis on efficiency. Gangwal's insights could be crucial as Southwest navigates a challenging economic environment and increasing competition from other low-cost carriers.
The appointment of Gangwal is the latest development in the ongoing saga between Southwest Airlines and Elliott Management. It remains to be seen how Gangwal's addition to the board will impact the company's strategy and leadership, but his experience and expertise are sure to be a welcome addition for Southwest.