On July 25, 2024, a Southwest Airlines plane took off from Hollywood Burbank Airport in Burbank, California.
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Southwest Airlines The airline has warned staff it will have to make “tough decisions” ahead of schedule to boost profits as it comes under pressure from activist Elliott Management, which has sought advice from the airline leadership changes.
This summer, Southwest Airlines announced a series of major changes to its more than 50-year-old business model in an effort to increase revenue. The company plans to ditch open seating in favor of assigned seating, offering seats with more legroom, thereby commanding higher fares, and starting red-eye flights.
It also started allowing its flights to Google flights and kayak Chief Operating Officer Andrew Watterson said in a video message to employees last week that the company had changed its advertising to target more younger consumers.
“Now, that’s not enough. We also have to change our network,” Watson said in the video, a transcript of which was seen by CNBC.
“We are facing several difficult decisions. This is not about closing stations. But we need to continue to drive growth on the network to help us return to profitability,” Watson said. “So if you are personally affected, I apologize in advance.”
The airline does not plan to announce furloughs but may reduce operations in some cities and employees may be moved to other locations, according to a person familiar with the matter. The airline said it was looking to reduce costs and focus on profitable flying.
Other businesses such as JetBlue Airways Routes have been cut this year to deploy aircraft on flights that generate higher revenue.
Southwest will provide more details about its initiatives and route changes during an investor day Thursday at its Dallas headquarters.
Elliott has been pushing for leadership changes at the airline and criticized Southwest management for not doing enough to improve the company’s bottom line. Earlier this month, executive chairman and former chief executive Gary Kelly said he would step down after the airline’s shareholder meeting next year.
Southwest Airlines did not immediately comment on the employee’s news. The video was previously reported by industry blog View from the Wing.
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