Southwest Airlines has alerted its staff that “difficult decisions” will need to be made in the coming months as part of efforts to improve the company’s financial performance.
The Dallas-based carrier is facing increasing pressure from activist investor Elliott Investment Management, which has been pushing for major changes at the airline.
In a video message to employees, Chief Operating Officer Andrew Watterson acknowledged that these upcoming decisions could affect staff, though he did not specify what changes might be implemented. He emphasized that while station closures are not being considered, adjustments to the airline’s network are necessary to regain profitability.
“We have a couple of difficult decisions heading our way… I apologize in advance if you, as an individual, are affected by it,” Watterson said in the leaked memo.
Southwest has already introduced several changes to its business model in response to Elliott’s influence. These include ending its well-known open seating policy, offering premium extra-legroom seats, and adding red-eye flights. However, according to Watterson, these moves alone may not be enough to address the company’s financial challenges.
The airline is set to provide further details on its plans during its upcoming investor day on September 26. Employees and industry observers are anticipating more concrete measures aimed at improving profitability, with some concerned about potential layoffs or other cost-cutting strategies.
Elliott, which acquired a significant minority stake in Southwest earlier this year, has been critical of the airline’s recent performance, accusing it of failing to act quickly enough to address its financial struggles. The investment firm has called for leadership changes, including the ouster of CEO Bob Jordan, and has already successfully pushed for several board members to step down.
With input from PYOK and Beat of Hawaii.
