By Rajesh Kumar Singh and Nathan Gomes

(Reuters) -Elliott Investment Management called for leadership change at Southwest Airlines on Monday after reporting a stake worth about $1.9 billion in the U.S. carrier.

Southwest’s shares rose more than 7% in Wall Street morning trade.

The activist investment management firm said Southwest’s “poor execution” and its leadership’s “stubborn unwillingness” to evolve the company’s strategy have led to deeply disappointing results for shareholders, employees and customers.

“We believe that new leadership is required at Southwest,” the firm said in its letter to the airline’s board.

Southwest did not immediately respond to a request for comment.

Dallas-based Southwest, a loyal Boeing customer, has been reeling from the planemaker’s ongoing safety crisis. It has warned of a hit to earnings as it expects to receive just 20 Boeing aircraft this year, less than a quarter of the number it had anticipated.

Southwest had planned to start operating MAX 7 aircraft – the smallest MAX plane – this year but its FAA certification is now mired in uncertainty after Boeing withdrew a request for a safety exemption.

The carrier has called Boeing’s delays “significant challenges” for this year and next as they have forced Southwest to moderate its growth plans.

Elliott, known for pushing for change to boost shareholder returns, said Southwest CEO Bob Jordan has delivered “unacceptable” financial and operational performance quarter after quarter, resulting in seven negative guidance revisions in the last 17 months.

It asked for an overhaul of the airline’s board, saying it has “failed to hold management accountable for poor execution and has been unable to catalyze (or permit) the necessary strategic evolution.”

Elliott said Southwest’s board, with which it has asked for a meeting, currently does not include any director with external airline experience, and a majority of the independent directors were appointed by Executive Chairman Gary Kelly.

“The mandate from the Board has been clear: Keep doing things the way they have always been done,” it said.

Southwest’s shares have fallen nearly 4% this year, compared with a roughly 12% rise in the S&P 500 index. “We are not surprised by the activist interest in Southwest given the very strong franchise with valuable tangible and intangible assets,” Raymond James analyst Savanthi Syth wrote in a note. Southwest, however, is not alone in struggling with Boeing delays, with rival United Airlines taking a $200 million hit in the first quarter. The airline sector nonetheless expects to do well with strong demand for summer travel. Southwest shares trade about 19.52 times their forward profit estimates, compared with United’s 4.74 and the industry multiple of 7.19.

(Reporting by Rajesh Kumar Singh in Chicago and Nathan Gomes in Bengaluru; Editing by Tasim Zahid, Kirsten Donovab)