DALLAS (AP) — Activist shareholder Elliott Investment Management has bought a $1.9 billion stake in Southwest Airlines and is seeking to force out the CEO of the airline, which has struggled with operational and financial problems.

Shares in the airline rose 7% Monday, their second-best day since 2020.

In a letter to Southwest’s board, the investment firm complained that Southwest’s stock price has dropped more than 50% in the last three years.

Elliott said Southwest has failed to evolve, hurting its ability to compete with other carriers. The firm blamed the Dallas-based carrier’s massive flight cancellations in December 2022 on what it described as the airline’s outdated software and operational processes.

“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 investment firm said in the letter, dated Monday.

Southwest CEO Robert Jordan “has delivered unacceptable financial and operational performance quarter after quarter,” the letter read. It said Jordan and former CEO Gary Kelly, now the airline’s executive chairman, “are not up to the task of modernizing Southwest.”

Elliott is calling for executives from outside the company to replace Jordan and Kelly, and for “significant” changes on the board, including new independent directors with experience at other airlines.

Southwest said it was contacted by Elliott on Sunday and looked forward “to better understanding their views on our company.”

“The Southwest Board of Directors is confident in our CEO and management’s ability to execute against the company’s strategic plan to drive long-term value for all shareholders, safely and reliably serve our customers and deliver on our commitments to all of our stakeholders,” a spokesperson said in a statement.

For years, Southwest appealed to cost-conscious flyers by not charging fees for a checked bag or changing a reservation. Its planes don’t have a premium cabin. Its closest rivals dropped change fees during the pandemic, however, and they are winning over upscale travelers with better seats and amenities.

In April, when Southwest reported a $231 million first-quarter loss, Jordan seemed to bend to those market pressures by announcing that Southwest was considering changes to its boarding and seating policies. The airline even took the rare step of dropping four cities from its map.

Savanthi Syth, an airline analyst for Raymond James Financial, said Elliott was likely attracted by Southwest’s well-known brand, leading position at many airports and strong balance sheet, among other attributes. She suggested that necessary changes shouldn’t be that hard to achieve.

Southwest grew rapidly coming out of the pandemic, adding service to 18 more cities. Syth said Southwest has recognized the need to scale back growth, although six or eight months too late, resulting in higher costs.

The airline had little choice in trimming its growth: It can’t get all the jets it ordered because of production cutbacks at Boeing since a door plug blew out of a 737 Max during an Alaska Airlines flight in January.

Southwest carries the most passengers within the United States, but Delta, United and American — all of which have more extensive international routes — are much larger by revenue. Southwest earned a profit for 47 straight years — an unmatched record in the airline business — until the coronavirus pandemic hit in 2020.

Southwest reported record revenue of $26.1 billion last year, but its $465 million profit was down from the previous two years and about one-tenth of Delta’s profit.

Delta and United have emerged from the pandemic as by far the most profitable U.S. airlines, and that shows up in their relative stock performance. At the close of trading Friday, Southwest shares were down 52% from three years earlier – about the same as American. But Delta shares gained more than 9% in that span, while United shares dipped but only around 7%.

The Wall Street Journal first reported Elliott’s stake in Southwest.

CUPERTINO (AP) — Apple’s annual World Wide Developers Conference on Monday is expected to herald the company’s move into generative artificial intelligence, marking its late arrival to a technological frontier that’s expected to be as revolutionary as the invention of the iPhone.

The widely anticipated display of AI to be embedded in the iPhone and other Apple products will be the marquee moment at an event that traditionally previews the next version of software that powers the company’s hardware lineup.

And Apple’s next generation of software is expected to be packed with an array of AI features likely to make its often-bumbling virtual assistant Siri smarter, and make photos, music, texting — and possibly even creating emojis on the fly — a more productive and entertaining experience.

True to its secretive nature, Apple hasn’t provided any advance details about Monday’s event being held at the company’s Cupertino, California, headquarters.

But CEO Tim Cook has dropped strong hints during the first few months of this that Apple is poised to reveal its grand plans to enter a space that has been fueling an industry boom during the past 18 months.

AI mania is the main reason that Nvidia, the dominant maker of the chips underlying the technology, has seen its market value rocket from about $300 billion at the end of 2022 to about $3 trillion. The meteoric ride allowed Nvidia to briefly surpass Apple last week as the second most valuable company in the U.S. Microsoft earlier this year also eclipsed the iPhone maker on the strength of its so-far successful push into AI.

But analysts have been have been getting increasingly worried that Apple may be falling too far behind in the rapidly changing AI space, a concern that has been compounded by an uncharacteristically extended slump in the company’s sales. Both Google and Samsung already have released smartphone models touting AI features as their main attractions.

That’s why analysts such as Dan Ives of Wedbush Securities view Monday’s conference as a potential springboard that catapults Apple into another robust phase of growth. Ives believes infusing more AI into the iPhone, iPad and Mac computer will translate into an additional $450 billon to $600 billion in market value for Apple.

Monday’s conference “represents the most important event for Apple in over a decade as the pressure to bring a generative AI stack of technology for developers and consumers is front and center,” Ives wrote in a research note.

Apple definitely could use the boost that AI may be able to provide, particularly for its 13-year-old assistant Siri, which Forrester Research Dipanjan Chatterjee now calls an “oddly unhelpful helper.”

Meanwhile, OpenAI’s ChatGPT is getting increasingly conversational — so much so that it recently sparked accusations of intentionally copying a piece of AI software voiced by Scarlett Johansson — and Google last month previewed an AI “agent” dubbed Astra that can seemingly see and remember things.

Besides using AI to spruce up Siri, Apple may also team up with OpenAI to bring some elements of ChatGPT to the iPhone, according to a wide range of unconfirmed reports leading up to Monday’s conference.

This will be the second straight year that Apple has created a stir at its developers conference by using it to usher in its entrance into a trendy form of technology that other companies already had been making inroads.

Last year, Apple provided an early look at its mixed-reality headset, the Vision Pro, which wasn’t released until early this year carrying a $3,500 price tag that has been a major impediment to gaining much traction. Nevertheless, Apple’s push into mixed reality, tweaked with a twist that it bills as “spatial computing,” has raised hopes that what is currently a niche technology will turn into a huge market.

Part of the optimism stems from Apple’s history of releasing technology later than others and then using sleek designs and services combined with slick marketing campaigns to overcome its tardy start to unleash new trends.

“Apple’s early reticence toward AI was entirely on brand,” Forrester’s Chatterjee wrote in a preview of the developers conference. “The company has always been famously obsessed with what its offerings did for its customers rather than how it did it.”

Bringing more AI into the iPhone, in particular, will likely raise privacy issues — a topic where Apple has gone to great lengths to assure its loyal customer base that it can be trusted not to peer too deeply into their personal lives.

One way Apple could reassure consumers that the iPhone won’t be used to spy on them is to leverage its own chip technology so most AI-powered features are handled on the device itself instead of remote data centers, often called “the cloud.” Going that route also would help protect Apple’s profit margins because AI technology through the cloud is far more expensive than when it is run solely on a device.