Southwest Airlines (LUV -0.44%) has badly underperformed its rivals so far in 2024, prompting a prominent activist to get involved.

Shares of the airline traded up 7% at the open Monday after Elliott Investment Management confirmed a $1.9 billion stake in the company.

An airline flying on fumes

Southwest has been flying into headwinds of late. The company's shares coming into trading Monday were flat for the year, compared to up 28% and 25% at United Airlines Holdings and Delta Air Lines, respectively.

The airline's route network arguably makes it less efficient than those rivals, and it trails on fee income. Southwest has also been hindered by problems at Boeing, limiting the supply of new 737s for its fleet.

Activist Elliott has seen enough, saying in a letter to the board that "Southwest's poor execution and leadership's stubborn unwillingness to evolve the company's strategy have led to deeply disappointing results for shareholders, employees and customers alike."

The airline's "rigid commitment to a decades-old approach" inhibits returns, according to Elliott, and has caused issues including Southwest's December 2022 operational meltdown.

Elliott believes that with the right plan, the stock could hit $49 per share within 12 months, a 77% return compared to where the stock traded at the time of the letter.

Is Southwest stock a buy?

Southwest is a storied brand, but the stock actually trails Delta not just for the year but over the past five- and 10-year periods as well. The company has outgrown its nimble origins, and its competitors have become much more savvy in how they compete.

Given the situation, Southwest is an ideal candidate for an activist looking to shake things up. Elliott is seeking a board and management overhaul and could push for the company to reverse some passenger-friendly perks like free bags and no assigned seating.

Southwest's pricing strategy also is outdated compared to rivals who have learned to segregate the cabin between basic economy and more premium seating.

There are few easy choices for Southwest right now. Elliot's involvement will likely speed the decision-making process, but investors need to be aware there is no quick fix to get Southwest soaring again.