Southwest Airlines Warns Staff of ‘Tough Decisions’ Ahead, According to Bloomberg Report by Reuters

Southwest Airlines has signaled to its employees that it will be making difficult decisions aimed at restoring profitability and addressing pressures from activist investor Elliott Investment Management, according to a report from Bloomberg News.

The airline is contemplating adjustments to its flight routes and schedules to bolster revenue, as indicated by a video message from Chief Operating Officer Andrew Watterson. He expressed regrets in advance for any individual impacts resulting from the upcoming changes but did not provide specific details about the planned alterations.

The company has been facing challenges in recovering from the COVID-19 pandemic, compounded by delays in aircraft deliveries from Boeing and an oversaturated domestic market.

To attract more premium travelers, Southwest plans to introduce assigned seating and extra-legroom options, along with launching overnight flights. Further information regarding these initiatives is expected to be shared with investors on September 26.

Additionally, Elliott, which holds a 10% stake in the airline’s common shares, has expressed its desire to replace CEO Robert Jordan, despite the airline’s commitment to revamping its board.