Southwest Airlines has given in to demands from Elliott Investment Management after months of an ongoing battle and agreed to restructure board leadership in a new settlement.

Southwest Airlines Thursday reached an agreement with activist investor Elliot Investment Management to head off a proxy battle.

Kelly's retirement and Southwest's appointment of six new board members follow mounting pressure from hedge fund Elliot Investment Management.

The airline gave the activist a significant presence on its board but not the majority control the hedge fund initially sought.

Southwest Airlines (LUV) reached a settlement with activist investor Elliott Investment Management, ceding six board seats to the firm seeking control over the struggling airline.

Southwest Airlines Co. has agreed to allow Elliott Investment Management to nominate five directors to its board, as the carrier seeks to address the activist’s push for changes and salvage the job of its chief executive officer.