Southwest Airways plans to remove about one-third of its flights to Atlanta subsequent yr to save cash because it comes underneath strain from a hedge fund to extend income and enhance the airline’s inventory value.
The retreat in Atlanta, the place Southwest is much smaller than Delta Air Strains, will remove greater than 300 jobs for pilots and flight attendants, though they are going to have an opportunity to relocate, in response to the corporate.
A Southwest official mentioned Wednesday the airline wants to chop unprofitable routes, and “demand for Atlanta doesn’t help our degree of flying.”
Whereas the airline’s planners “attempt every part they’ll earlier than making exhausting choices like this one, we now have to make this alteration to assist drive us again to profitability,” the Atlanta-based official, Tiffany Laurent, mentioned in a memo to staff.
Shares of Dallas-based Southwest fell 4.6%.
Southwest executives are anticipated to element different adjustments that it plans to make when it holds an investor assembly Thursday. The session is in response to Elliott Funding Administration’s marketing campaign to shake up Southwest’s management and reverse a decline in income over the previous three years.
Southwest will minimize 58 flights per day and scale back its presence at Hartsfield-Jackson Atlanta Worldwide Airport from 18 to 11 gates, in response to the Southwest Airways Pilots Affiliation, which says the information is painful for Atlanta-based staff.
“It’s merely superb that the airline with the strongest community within the historical past of our business is now retreating in a significant market as a result of this administration group has didn’t evolve and innovate,” the union mentioned in a memo to pilots.
Invoice Bernal, president of the Transport Staff Union native representing Southwest flight attendants, mentioned his union is outraged by the discount of Atlanta jobs. He mentioned Southwest assured the union that it could develop in Atlanta.
“That is gaslighting at its best,” Bernal mentioned in a memo to union members. “But once more, flight attendants are paying the value for poor administration choices.”
A Southwest spokesperson responded, “Choices like these are troublesome for our firm due to the consequences on our individuals, however we now have a historical past of greater than 53 years of guaranteeing they’re taken care of.”
Whereas retreating in Atlanta, Southwest printed its schedule via subsequent June on Wednesday, and it contains new routes between Nashville and 6 different cities together with 5 new red-eye flights from Hawaii to Las Vegas and Phoenix. These additions begin in April.
Earlier this yr, Southwest pulled out of 4 smaller markets and introduced it could restrict hiring in response to weakening monetary outcomes and delays in getting new planes from Boeing.
Extra notably, CEO Robert Jordan mentioned in July that Southwest will start assigning passengers to seats and put aside practically one-third of its seats for premium service with extra legroom.
