NEW YORK >> Elliott Investment Management has launched a boardroom battle at Southwest Airlines seeking to replace 10 of 15 directors, as the hedge fund pushes to oust the airline’s chief executive and improve performance, it said on Tuesday.

The move is an escalation in a fight over who should lead the airline and how it should change. Southwest’s stock price has fallen 24% in the last 52 weeks, as it tries to implement a turnaround plan including adding seats with more legroom, moving to assigned seats and naming a new board member in July.

The board nominees by activist investor Elliott consist of former airlines chief executives, consultants and officials, including former Virgin America CEO David Cush and Robert Milton, the former CEO of Air Canada.

These candidates would give shareholders a choice between the existing board or a new one that “brings relevant expertise, fresh thinking and accountability”, Elliott said in a statement.

Elliott said in a regulatory filing last week that it had a 7% beneficial ownership, putting it close to the 10% stake required for an investor to call a special meeting. The firm has a roughly 11% interest when also including derivatives.

The hedge fund has pushed to replace both Robert Jordan, who has been CEO since 2022, and Executive Chair Gary Kelly, who had been CEO before Jordan.

The company did not immediately respond to a request for comment.

Elliott had not shown willingness to engage in any meaningful conversations, CEO Jordan said in an earnings call last month, adding that the airline was taking steps to transform itself.

Earlier today, Starbucks named Chipotle Mexican Grill head Brian Niccol as its new CEO after facing pressure from the hedge fund, which had built a $2 billion stake in the coffee chain.

Southwest reacted to Elliott’s investment by adopting a shareholder rights plan, or poison pill, that would kick in after an investor acquires 12.5% or more of the stock and allow other shareholders to buy more stock at a discount to try and prevent a takeover.

“We expect investors are unlikely to vote out the current leadership without entertaining go-forward plan, particularly as LUV’s recent actions have shown a growing willingness to adapt in ways that challenge Elliott’s ‘stagnant’ characterization,” Jefferies said in a note before the formal announcement.

The carrier expects third-quarter unit revenue to be flat to down 2% year-on-year, while non-fuel operating costs are estimated to be up 11%-13%.

Earnings have been under pressure in recent quarters, partly because of delays in plane deliveries from Boeing, which have hit revenue and worsened cost pressures and pricing pressure as an industry-wide overcapacity in the domestic market have dampened airfares.