Southwest Airlines boss warns 'difficult decisions coming' for ailing carrier - with its biggest perk in doubt

Southwest Airlines has warned that it volition person to marque immoderate 'difficult decisions' successful coming days nether a program to reconstruct profits.

The announcement, successful a video sent to employees Thursday, comes arsenic the aboriginal of its passenger-friendly policies are nether threat.

Already, Southwest  has said it is axing its fashionable unfastened seating policy after fractional a century. Instead, it volition soon complaint passengers a interest to prime a seat. 

Southwest bosses are desperately trying to chopped costs arsenic they conflict Elliott Investment Management, a almighty hedge money that has amassed a 10 percent involvement successful the carrier. 

As good arsenic a alteration of management, Elliott is demanding that Southwest's iconic 'bags alert free' perk is ditched - arsenic they accidental charging for baggage volition bring successful tens of millions of dollars successful revenue.

Chief operating serviceman Andrew Watterson told employees successful the leaked video that the worst has inactive yet to come. It is thought that Southwest volition chopped loss-making routes to prevention money.

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'There are immoderate hard decisions coming arsenic well,' Watterson said, Bloomberg reported Saturday

'Not metropolis closures. But you know, bigger changes for immoderate cities. ' the C-suite staffer continued.

'I apologize successful beforehand if you arsenic an idiosyncratic are affected by it,' helium added.

He did not supply specifics, saying lone that Southwest volition merchandise a revised formation docket connected Wednesday that should see the changes.

In a connection explaining the video, Southwest said it was portion of a regular bid of explanatory presentations the COO sends to staffers.

Meanwhile, connected Thursday - the time aft the caller docket is acceptable to beryllium sent retired - the bearer will provide much details connected plans to boost profits, specified arsenic the introduction of assigned seats.

The caller steps volition beryllium announced during an capitalist time successful Dallas, arsenic investors like Elliott combat to oust CEO Bob Jordan and instill a caller committee with its ain nominees.

'We're trying to get much retired of what we already have, but getting our costs nether power is not going to beryllium enough,' Watterson reportedly told employees this past Thursday.

'Because we're not going to bash this connected the backmost of employees oregon customers.

'It has to beryllium connected the gross broadside that we marque the traction to get our profitability and equation balanced.'

Elliott, 1 of the airline's biggest investors, has claimed the company's concern exemplary has failed to code shifting demands successful the user sphere for much premium products.   

Bonuses similar the 'bags alert free' perk and unfastened seating that are indelibly linked with the airline's representation appeared to beryllium portion of the firm's concerns, arsenic the bearer has besides changed its ads to scope younger consumers.

This comes successful effect to seats being near vacant since the pandemic, successful portion by concern radical who are not traveling arsenic overmuch arsenic they utilized to.

Elliott has said Jordan and Southwest's soon to beryllium erstwhile Chairman Gary Kelly person refused to accommodate the airline's concern model, hence the caller changes aft Kelly stepped down connected September 10.

In a statement, Southwest said Kelly volition relinquish his presumption come the carrier's yearly gathering adjacent spring. 

The hose added that six of its remaining 14 directors volition resign aft the November committee meeting, but did not specify whom.

The institution volition sanction 4 caller autarkic directors to instrumentality their place, with committee subordinate Jordan's destiny besides uncertain.

A study retired earlier this twelvemonth showed however airlines including Delta, United and American pocketed a staggering $33.3 cardinal from conscionable baggage fees past year - a crisp 15 percent emergence from $29 cardinal successful 2022.

This sum is solely made up of fees from larger carry-on bags, modular checked baggage fees, and fines for overweight oregon other ample checked bags and accounted for 4.1 percent of planetary hose gross past year.