Southwest Airlines director buys $100 million worth of stock to fight activist Elliott

Southwest Airlines (LUV) just got a lot of support for its turnaround plan – from within. Reuters reports that board member Rakesh Gangwal, the founder of Indian budget airline Indigo, bought a block of shares in the company worth $100 million.

Gangwal is one of several new board members nominated during Southwest’s Battle with Elliott Investment Managementa hedge fund that wants CEO Bob Jordan from the jobthe installation of a list of directorsand a comprehensive business overview. Another board addition is Robert Fornarnothe former CEO of Spirit Airlines (SAVE).

“I have long admired Southwest Airlines and am honored to join the board,” Gangwal said in an accompanying statement Announcement of his appointment. “Along with the rest of the Board, I look forward to supporting the company’s strategic direction and further building its well-deserved reputation as one of the most admired and respected airlines in the world.”

Southwest was make a lot of changesincluding an expected reduction in routes, layoffs and other changes such as route abandonment longstanding open seating policy. Elliott has said the moves come after a long string of bad dealsoo little, too late.

A filing with the Securities and Exchange Commission shows that Gangwal’s shares were affected bought on Tuesday. According to data provider FactSet (FDS) Gangwal’s stake dwarfs the holdings of CEO Jordan, who owns $28 million worth of Southwest stock. Elliott’s $1.8 billion in holdings, good for 11% of the company, dwarfs both. The hedge fund told Southwest’s other investors would like to hold a special meeting wants to implement its takeover plan, but has not yet given a fixed date.

Gangwal reiterated his commitment to Southwest as it stands, telling Reuters that he believes “changing the board structure and leadership beyond what has already been announced would be counterproductive and not in the best interests of shareholders.”

Southwest shares are up 4% in early trading Thursday, and shares are up 8.4% for the year.

Correction: An earlier version of this story incorrectly stated that ex-Sen. Roy Blunt joins Southwest’s board of directors. He is leaving the board.