Southwest Airlines has reached a settlement agreement with activist shareholder Elliott Investment Management to avoid a proxy battle. In exchange, the airline’s board will expand by six directors and expedite the retirement of Chairman Gary Kelly. Notably, this deal allows CEO Robert Jordan to remain in his position.

The company announced that five of Elliott’s board nominees, along with former Chevron CFO Pat Barta, will join the board. A new chairman will be appointed to succeed Kelly, who will step down in November.

Elliott stated, “We are pleased to have reached an agreement with Southwest Airlines to add six new directors, which will enhance and revitalize its board.”

Last week, Elliott and Southwest were preparing for a proxy fight, with the activist investor pushing to appoint ten new directors and calling for a special meeting in December for elections. Elliott’s moves were aimed at ousting both Kelly and Jordan.

With the settlement and recent board reshuffling, a total of eight new members will join, marking the largest board overhaul Elliott has pushed for within the U.S. airline industry.

Previously, in September, Southwest had announced that the board would ultimately be reduced to 13 members, and that Kelly planned to resign in the spring of next year. However, the board expressed strong support for Jordan.

In addition, Southwest revealed surprising third-quarter profits, benefiting from improved pricing and demand, as well as rebooked passengers affected by a global outage in July.

According to LSEG data, Southwest reported adjusted profits of $89 million, or 15 cents per share, while analysts had expected a loss of $12.65 million, predicting breakeven results. Revenue grew by 5.3%, reaching $6.87 billion.

Due to rising costs, the airline is taking steps to restore steady profitability and is seeking high-margin revenue sources, including vacation packages, overnight flights, and preferred seating.

The airline anticipates a 3.5% to 5.5% increase in revenue per available seat mile for the fourth quarter, while expecting capacity to decrease by about 4%.