Summary
- Southwest Airlines warned employees of upcoming ‘difficult decisions’ in a bid to cut costs and focus on profitable flying.
- More details are expected on Thursday at the airline’s investor day in Dallas. There are reportedly no plans for furloughs, but the carrier’s presence in some cities may be reduced.
- Changes have already been seen in policies like the end of free seating, the start of red-eye flights, and more premium seating options.
Southwest Airlines has reportedly warned its employees to brace for ‘difficult decisions’ ahead. Faced with increasing pressure from Elliott Investment Management, the carrier is seeking to cut costs and focus on profitable flying.
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According to reports from CNBC, the airline’s Chief Operations Officer, Andrew Watterson, issued a video message to staff last week, saying,
“Now, all that’s not enough. We also have to change our network. We have a couple of difficult decisions heading our way. It’s not station closures. But we need to keep moving the network to help us drive back to profitability. And so I apologize in advance if you as an individual are affected by it.”
More details to be announced on Thursday
While the changes may not currently be known, the airline is expected to provide more detail on any proposed changes at an investor day this Thursday, which will be held at its Dallas headquarters. Simple Flying has reached out to Southwest Airlines for further comment.
CNBC also reported that a source close to the airline suggested that there are no plans to furlough any employees, although it could reduce its presence in certain cities, with staff members offered the opportunity to transfer elsewhere.
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Southwest Airlines’ rival, JetBlue, recently cut a number of routes in a bid to reduce costs following its failed acquisition with Spirit Airlines. Meanwhile, Spirit Airlines itself has also been reshuffling its network.
Changes ahead for Southwest Airlines
Southwest Airlines has been no stranger to change this year already. In July, the carrier announced some of the biggest shake-ups in its 53-year history, when it revealed its free seating policy would be coming to an end and that it would begin to offer extra legroom seats in a bid to boost revenue. The airline also plans to commence red-eye flights, increasing aircraft usability.
At the time, Southwest Airlines said that 80% of its passengers prefer assigned seating, with CEO Bob Jordan saying,
“Although our unique open seating model has been a part of Southwest Airlines since our inception, our thoughtful and extensive research makes it clear this is the right choice — at the right time — for our Customers, our People, and our Shareholders.”
Photo: Southwest Airlines
Elliott Investment Management has also been pushing for leadership changes at Southwest Airlines, with the carrier’s Executive Chairman and former CEO, Gary Kelly, recently announcing his departure.