Southwest Airlines shares jumped on Thursday after the company said its third-quarter revenue would be much stronger than previous projections.
Southwest previously forecasted a decline in revenue of 2% compared to the same period in 2023. However, after a summer of strong demand, the airliner is now projecting to have a 3% year-over-year revenue increase.
The company also made a number of other announcements on Thursday. It said it plans to initiate a share buyback program of $2.5 billion and is adding industry veteran Bob Fornaro to its board. Fornaro was the CEO of AirTran Airways in 2011 when the company was acquired by Southwest and later served as CEO of Spirit.
Southwest also detailed the previously announced changes to its business, including redeye flights, the introduction of assigned seating and premium seats, boarding upgrades, and improved customer care.
“We’re now ushering in a new era at Southwest, moving swiftly and deliberately to transform the Company by elevating the Customer Experience, improving financial performance, and driving sustainable Shareholder value,” said CEO Bob Jordan in a statement.
The latest moves made by Southwest are another step in the company’s attempts to deal with the pressure of activist investor Elliott Management. Elliott, which holds 11% financial interest in the company, previously argued for sweeping changes that included Jordan’s ousting.
Southwest’s stock jumped more than 4% on Thursday following the announcement compared to a previous closing price of $28.39 per share.