• Southwest's sales and profits topped analysts' estimates and the airline forecast higher revenue to end the year.
• The carrier's leaders have been trying to fend off activist investor Elliott, which has called for leadership changes at the airline.

Southwest Airlines' third-quarter profit fell from a year ago but topped Wall Street estimates as the carrier worked to drum up revenue and fend off activist investor Elliott Investment Management.

Elliott and Southwest struck a deal, announced Thursday, that averts a proxy fight and adds six of the activist's candidates to the board. CEO Bob Jordan will keep his job as part of the deal.

The Dallas-based carrier forecast unit revenue for the fourth quarter would increase 3.5% to 5.5% on a 4% drop in capacity compared with a year ago. It said costs, excluding fuel, would likely rise as much as 13%.

"Thus far in the quarter, travel demand remains healthy and bookings-to-date for the holiday season are strong, demonstrating the continued resilience of the leisure travel market," Southwest said in an earnings release.

Other carriers have pointed to strong travel demand to close out 2024 as airlines scale back unprofitable capacity that pushed down airfare.

Separately, Southwest last month laid out a three-year plan that the company would add $4 billion to earnings before interest and taxes in 2027. The airline also said it authorized a $2.5 billion buyback and would slash underperforming flights from Atlanta to cut costs.

Southwest said Thursday that it will repurchase $250 million of Southwest stock through an "accelerated" program under the overall buyback plan.

The carrier is planning to abandon its longtime open seating to instead charge for seats as well as offer extra legroom options that come at a higher price, the biggest changes in its more than 50 years of flying.

Here is how Southwest performed in the third quarter compared with Wall Street expectations, according to consensus estimates from LSEG:

• Earnings per share: 15 cents adjusted vs. an expected zero cents
• Revenue: $6.87 billion vs. $6.74 billion expected

It reported third quarter revenue of $6.87 billion, an increase of more than 5% on the year. Net income fell 65% from the year-earlier quarter to $67 million, or 11 cents a share, though that was ahead of estimates. Adjusting for one-time items, it reported $89 million in net income or 15 cents a share, compared with analysts' forecasts to break even on an adjusted basis.