Southwest Airlines is cutting about 300 employees from AirTran Airways’ workforce at Hartsfield-Jackson International Airport as it reshapes AirTran’s operation in Atlanta.
Southwest, which bought AirTran in 2011 and started its own Atlanta flights last year, said there are openings in other cities where it operates for all of the 300 ground workers — baggage handlers, ticket counter and gate agents — if they are willing relocate. If not, they will get severance packages and leave the company.
The cut comes as Southwest prepares to deemphasize connecting flights in AirTran’s operation at Hartsfield-Jackson in November by smoothing out the flight schedule and catering more to fliers coming and going from this market. Southwest says Atlanta will be a “focus city” instead of a connecting hub as it has been for AirTran.
The change reflects a central feature of Southwest’s entry into Atlanta. It was heralded by some as a fresh breath of competition, owing to the Dallas-based airline’s reputation as a leading low-cost carrier with free checked bags and an offbeat service style.
But because Southwest is downsizing AirTran’s big Atlanta hub, it’s not as much introducing a new competitor as transforming an existing one.
Atlanta was the center of AirTran’s world, but it plays a smaller role within the much larger Southwest.
During its heyday around 2008, Orlando-based AirTran had as many as 6,000 employees based in Atlanta and some 260 flights from Hartsfield-Jackson. The bulk of its pilots and flight attendants were based here. AirTran had shrunk to about 5,300 employees and 220 Atlanta flights by 2010 when the Southwest deal was announced.
Southwest has discontinued more than a dozen of AirTran’s nonstop routes from Atlanta, including to Dallas; Washington Dulles; Atlantic City; Wichita; Branson, Mo.; Portland, Me. and Bermuda, though it has also added a few. Southwest and AirTran combined now fly to about 46 cities nonstop from Atlanta.
By November, Southwest will have close to 4,800 employees in Atlanta and 170 daily flights, according to the company.
“I think the AirTran footprint has shrunk about 25 percent since we initially acquired them,” said Southwest chief executive Gary Kelly.
In a hub like AirTran’s, slow periods alternate with busy periods, when dozens of flights land, passengers rush off to connect to other flights and the planes take off again. That requires more employees to check in passengers, board planes and load baggage during busy peak periods.
Southwest’s system focuses more on “point-to-point” service rather than connecting flights, which requires fewer employees working at the airport – meaning Southwest will need 800 ground workers at Hartsfield-Jackson instead of the 1,100 AirTran has now.
“The Southwest structure is a lot more efficient,” said Southwest’s chief commercial officer Bob Jordan, who also is president of AirTran.
Southwest is gradually converting AirTran flights over to Southwest. The two airlines’ combined schedule of about 175 daily flights from Atlanta will remain roughly the same with the transition from AirTran hub to Southwest “focus city.” However, flight times will change to attract more travelers flying to and from Atlanta instead of to accommodate connections.
That could boost the competition for Atlanta travelers as Southwest goes up against Atlanta market leader Delta Air Lines.
Jordan said the airline has seen an 8 percentage point shift from connecting traffic to local traffic going to and from Atlanta.
Among AirTran’s union-represented ground workers in Atlanta, those affected by the job cuts are the least-senior workers. Employees who choose to relocate to other Southwest cities could get a roughly 30 percent increase in pay based on Southwest’s higher pay scales and will be paid to move, according to the company.
Southwest is also offering more senior employees in Atlanta the option of relocating or the option of taking a severance package and retiring – that could reduce the number of workers that will have to involuntarily leave, according to the company.
AirTran had a corporate center in Atlanta, but much of that work has been moved to Dallas.
Last year, Southwest announced it is closing AirTran call centers in Savannah and Carrollton and consolidating about 200 of those jobs in its Atlanta call center. Southwest also plans to open a pilot base and flight attendant base in Atlanta.
Jordan said the reduction of ground staff in Atlanta “is not a backing down of our commitment to Atlanta at all.”
Southwest announced a first quarter profit of $59 million, down from $98 million a year earlier.
The Dallas-based carrier said the results announced Thursday were affected by charges due to its acquisition of AirTran and changes in the value of fuel contracts. Southwest said revenue is soft for April, but bookings for May and June have been “solid.”
Southwest, which has long charged no change fees, also said Thursday it is putting in place a “No Show” policy for reservations starting May 10 for travel Sept. 13 or later. The new policy means customers who book nonrefundable fares and don’t show up for their flights will lose the value of their tickets. But if they cancel flights prior to departure, they will still be able to use the funds to fly Southwest in the future without a change fee.