Southwest Airlines has revised its third-quarter revenue forecast upward, approved a $2.5bn share buyback programme, and introduced a series of strategic changes as it faces mounting pressure from activist hedge fund Elliott Investment Management, according to a report by the New York Post.

The airline now expects unit revenue to grow by up to 3% for the third quarter compared to the same period last year, a notable increase from its previous forecast of a 2% decline. The boost is attributed to strong summer travel demand and the rebooking of passengers affected by disruptions during July’s CrowdStrike outage.

Southwest’s latest business plan aims to generate an additional $4bn in earnings before interest and taxes (EBIT) by 2027. The airline unveiled the changes including introducing assigned seating and seats with extra legroom –during an investor presentation at its Dallas headquarters, a move that comes in response to Elliott’s calls for a leadership overhaul and strategic shifts.

As part of its efforts to enhance governance and industry expertise, Southwest has appointed Bob Fornaro—former CEO of both Spirit Airlines and AirTran Airways—to its Board of Directors. Fornaro has previously served as a consultant for Southwest, providing valuable insights during its transformation process.

Fornaro’s addition follows criticism from Elliott Management, led by billionaire investor Paul Singer, which has argued that Southwest’s board members lacked sufficient industry knowledge. Elliott has also expressed concerns about the airline’s leadership, specifically targeting CEO Bob Jordan and former CEO Gary Kelly.

Earlier this month, Southwest announced that Kelly will retire following the company’s annual meeting next year, though the airline intends to retain CEO Bob Jordan. However, Elliott continues to push for additional leadership changes, blaming Jordan for what it describes as the airline’s declining performance.