The airline will appoint six new directors to its board, avoiding a proxy fight with the activist investor Elliott Investment Management, one of its largest shareholders.

Southwest Airlines struck a truce with Elliott Investment Management, giving the activist a significant presence on its board but not the majority control the hedge fund initially sought. The settlement announced Thursday deflects a potentially rancorous proxy fight and ends the acrimonious four-month battle over whether Southwest’s management is capable of pulling the airline out of a funk.