Southwest Airlines plans to reduce flights to and from Atlanta and pull out of some other airports, as its operations come under pressure from delays in deliveries of Boeing aircraft.
Dallas-based Southwest is the second-largest carrier at Hartsfield-Jackson International Airport, behind Atlanta-based Delta Air Lines.
Southwest currently operates up to 119 departures a day from Atlanta. That will decline to 94 daily departures maximum from Atlanta on weekdays in the airline’s revised summer schedule, according to spokesman Dan Landson.
The airline currently has routes to 43 cities from Atlanta, and will discontinue its route from Atlanta to Little Rock, Arkansas effective in June.
“Most of the revision was removing frequencies between already served markets, allowing us to continue serving most of our nonstop destinations available from ATL,” according to Landson.
“It’s unfortunate,” said Andrew Watterson, Southwest’s chief operating officer during an investor conference call Thursday. He said the airline had been restoring its service in Atlanta during the recovery from the COVID-19 pandemic, but “we could never quite get back to the level of performance we needed, at the scale we needed. And so it’s been reduced back down.”
Boeing is under intense scrutiny over safety issues, including production limits imposed after the midflight blowout of a door plug on a Boeing 737-9 Max operated by Alaska Airlines in January.
After that incident, the Federal Aviation Administration said it would halt any expansion of production of Boeing 737 Max jets, and said it would not approve any additional production lines for the Max until any quality control issues were resolved. Southwest has an all-737 fleet and a large order book for Max jets.
The challenges due to the Boeing aircraft delivery delays have damaged Southwest’s financial performance, and the company reported a net loss of $231 million for the first quarter of the year.
Southwest CEO Bob Jordan said in a written statement that the company has “already taken swift action to address our financial underperformance and adjust for revised aircraft delivery expectations.”
“The recent news from Boeing regarding further aircraft delivery delays presents significant challenges for both 2024 and 2025,” he said. ““To improve our financial performance, we have intensified our network optimization efforts to address underperforming markets.”
Credit: AP
Credit: AP
The airline said it will “significantly restructure” certain markets and also pull out of airports in Bellingham, Washington; Cozumel, Mexico; Syracuse, New York; and Houston’s George Bush Intercontinental Airport. Southwest also operates out of Houston’s Hobby airport.
“While it’s never our desire to exit a city or shrink service to a market, we are committed to our financial performance goals,” Jordan said during the investor call.
“It really relates to the areas that just don’t have a path to the level of financial performance that we need,” he said.
Employees affected by the cuts will be offered the chance to relocate to other jobs, according to the company. Southwest also plans to reduce its headcount by increasing efficiency including through attrition, voluntary leave programs and increased efficiency including using generative artificial intelligence for some customer support functions.
In Atlanta, Southwest carries about 7.6% of the passengers at Hartsfield-Jackson and faces stiff competition from Delta, which is the dominant carrier at Hartsfield-Jackson. Ultra low-cost carriers Spirit and Frontier also added flights in Atlanta in recent years.
In addition to reducing flights at Hartsfield-Jackson, Southwest also plans to cut capacity at Chicago O’Hare — though it also operates flights at Chicago Midway.
Before the Boeing safety crisis, Southwest last October increased its order book for Boeing 737 Max jets by adding 108 more orders for Boeing 737 Max 7 jets, and was relying on the jet to modernize its fleet and expand its network. It has nearly 500 737 Max jets on order.
Southwest ordered 58 Max 8 jets for delivery this year, but said it now expects to get only 20 deliveries of the jet this year.
As a result, it is slowing retirement of older aircraft in its fleet, but still expects to end the year with 802 aircraft in its fleet, down from 819 at the end of the first quarter.
The carrier now expects the number of aircraft seats it flies in the second half of the year and the frequency of trips to decrease year-over-year .
“However, there is no assurance that Boeing will meet this most recent delivery schedule,” Southwest said in its earnings press release.
Separately, Jordan said Southwest is considering making changes to the distinctive way it operates — specifically, its history of having an all coach-class cabins with open seating. That raises the possibility of seat assignments and premium seats.
“We are studying our seating and our cabin right now,” Jordan said in an interview on CNBC on Thursday. “Customer preferences do change over time.” He said the current system was designed at a time when planes weren’t as full.
Jordan told investors Thursday: “We will be back with detail when we’re ready, and if there is something we’re going to change, we’re aiming to do that at our investor day, which is planned in September.”
