Southwest Airlines Axes 1/3 of Flights to/from Atlanta

DALLAS — In an attempt to save costs on underperforming routes, Southwest Airlines (WN) is terminating roughly a third of its flights via Atlanta. This is the airline's most recent attempt to enhance operations in response to criticism from an activist investor Elliot Investment Management (EIM).

Southwest announced today that there will be 381 fewer weekly flights to or from Hartsfield–Jackson Atlanta International Airport (ATL) as of April than there were previously (567). After the adjustments, WN will now only serve 21 cities out of Atlanta, down from 37.

There is no telling how the recently revealed network changes may affect jobs at ATL, but WN claims that transfers will be offered to impacted employees and that layoffs are not anticipated.

The service modifications were previously announced this year and follows other recent initiatives to revitalize the company and improve performance. The cuts are offset by WN's Nashville expansion and additional redeye flights to Hawaii, the latter which will face increased competition after the Alaska-Hawaiian merger.

Changes Too Late?

Elliott Management announced yesterday that it would convene a special meeting “as soon as next week,” following the airline's announcement of a broad board reorganization that it thought would prevent a proxy war.

The carrier's second-largest stakeholder, EIM is putting pressure on WN airline to modernize its operations and turn a profit again. Elliott contends that the airline is years behind competitors in implementing improvements, which has negatively impacted financial performance and lowered the value of the stock.

As a result, the activist investor is attempting to remove Executive Chairman Gary Kelly and CEO Bob Jordan, the latter of whom has previously stated that he will retire in 2025. A list of ten directors, including airline executives and former government officials or regulators, has been proposed by the activist.

Southwest is battling costly new labor contracts and Boeing Co.'s reduced capacity to produce planes on time, both of which have driven up expenses, according to Bloomberg.

The airline had previously anticipated receiving 79 new aircraft this year, some Boeing 737-7, but in July it announced that it would only receive 20, meaning it will have to postpone retiring its older aircraft.