Rakesh Gangwal, co-founder of IndiGo and an influential figure in the aviation industry, has purchased 3.6 million shares of Dallas-based Southwest Airlines, valued at approximately USD 108 million. This significant acquisition was revealed in multiple filings submitted by the airline to the U.S. Securities and Exchange Commission (SEC).
Details of the Purchase
Gangwal acquired the shares through a series of transactions, paying between USD 29 and USD 30 per share. In total, the shares cost him around USD 108 million. His stock purchase aligns with his recent appointment to Southwest’s board in July 2023, amidst pressure from activist investor Elliott Investment Management for changes in the airline’s leadership and strategy.
Southwest Airlines Stocks
Following the announcement of Gangwal’s stock purchase, Southwest Airlines’ shares experienced a positive boost. As of 2:40 p.m. in New York, the airline’s shares rose by as much as 4.7%. This surge reflects investor confidence in the leadership decisions and the future prospects of the airline, particularly with Gangwal’s involvement.
Boardroom Tensions
Gangwal’s appointment to the board has not been without controversy. Elliott Investment Management, one of the airline’s largest shareholders, has been pushing for substantial changes in the company’s leadership structure. Despite the criticism, Gangwal remains firm in his stance, stating that further changes in the board’s structure would not be beneficial for shareholders.
In a statement released by Southwest, Gangwal said, “I believe changing the Board structure and top leadership beyond what has already been announced would be counterproductive and not in the best interest of shareholders.” He emphasized his commitment to the airline by making this significant investment during the company’s open trading window for insiders.
Strategic Move by Gangwal
Gangwal’s acquisition of Southwest Airlines shares is a significant vote of confidence in the company’s future. As an aviation veteran with a successful track record, his involvement and investment are likely to influence Southwest’s strategy moving forward. His support signals stability, even amid ongoing discussions about leadership changes.
