Southwest Airlines (NYSE:LUV) saw its shares rise by approximately 7% in premarket trading on Monday following a report that activist investor Elliott Investment Management has acquired a nearly $2 billion stake in the U.S. carrier.

The report, published on Sunday, indicates that Elliott Investment Management is now one of Southwest's largest shareholders and intends to advocate for strategic changes to address the airline's recent underperformance.

Southwest, a major U.S. airline, has been facing significant challenges due to higher operational costs and slower-than-anticipated revenue growth.

These issues have been exacerbated by delays in the delivery of 737 MAX aircraft from Boeing.

The delays have resulted in overstaffing and forced the company to scale back its growth plans.

This year, shares of Southwest Airlines have declined nearly 4%, contrasting with a roughly 12% increase in the S&P 500 index.