Southwest Airlines is cutting flights and jobs as part of a turnaround effort

A Southwest Airlines plane - Photo: Kevin Carter (Getty Images)
A Southwest Airlines plane - Photo: Kevin Carter (Getty Images)

Southwest Airlines (LUV) is making some big changes as it tries to fend off an activist takeover threat. The company is cutting routes and jobs according to recent media reports.

CNBC (CMCSA) reports that one change is the cutting of more than 300 pilot and flight attendant jobs. That lines up with previous reports that the company was preparing to make drastic reductions to its headcount.

Further, Bloomberg reports that the carrier is planning to cut nearly in half the number of its flights that travel through Hartsfield-Jackson Atlanta International Airport. That lines up with an industry-wide trend of cutting the number of flights on offer in order to help raise fares and boost revenue in the longer term.

Southwest Airlines says that some of the affected workers will get the chance to work in other markets. In a statement provided to Quartz, it said: “We continue to optimize our network to meet Customer demand, best utilize our fleet, and maximize revenue opportunities. 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.”

The hedge fund Elliott Management has an 11% stake in Southwest and is trying to use that position to steer a turnaround after a recent period of bad business. Though the company’s current management team is trying to retain control of the airline, Elliott thinks that shareholders should bring in a new team to run things.

“Southwest’s management and Board have chosen a go-it-alone path with the goal of obstructing a leadership change that is urgently needed,” the fund wrote in a recent letter to other shareholders.

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