Southwest Airlines is cutting unprofitable routes and reducing its presence in Atlanta.- The airline faces pressure from an activist investor to boost revenue and cut costs.
The budget airline plans to cut some 340 pilots and flight attendants from its busy Atlanta base, CNBC first reported Wednesday. A company spokesperson confirmed the news, citing lower bookings that have forced it to reduce service. Changes won't take effect for six months.
The spokesperson also noted a delay in new plane deliveries amid Boeing's 737 MAX issues.
"We continue to optimize our network to meet Customer demand, best utilize our fleet, and maximize revenue opportunities," the spokesperson said. "Decisions like these are difficult for our Company because of the effects on our People, but we have a history of more than 53 years of ensuring they are taken care of."
Bloomberg reported that the airline said the changes would reduce its Atlanta operations by about a third, to 381 weekly flights from 567, with 16 cities cut altogether.
Southwest was the second-largest operator in Atlanta behind Delta Air Lines, leaving customers will fewer choices out of the world's busiest airport.
Atlanta is just one of many Southwest network shake-ups this year
The airline announced plans in April to cut flights from Chicago O'Hare by one-third — an airport Southwest only started flying to in 2021 after favoring Chicago's smaller Midway airport for years.The airline also left four airports in August as part of a
Despite its shrinking network, Southwest is boosting flights where it has an edge. It said it would start flying six routes to and from Nashville and operating red-eye flights from Hawaii to the US mainland in April.
The network shakeups are part of a slew of strategy changes as the industry faces headwinds and a hedge fund with a sizable new stake pushes for changes.
Southwest announced in July it would end its long-standing open-seating policy and start selling premium seats. Its also committed to updating its outdated technology, which led to a crippling meltdown in December 2022.
Further changes are likely to be announced at an investor day on Thursday, which will lay out Southwest's future as we know it.
It's likely the low-cost carrier, famous for its open-seating and two free checked bags, will mold more into a mainline carrier — something Elliott believes will boost profits and improve the customer experience.
Correction: September 25, 2024 — An earlier version of this story misstated the frequency of Southwest's flights into and out of Atlanta. It reportedly plans to operate 381 flights weekly, not daily, down from 567 weekly flights. The story also misstated when Southwest is set to start red-eye flights from Hawaii. It plans to start flying those routes in April, not in February.