Southwest Air Warns of ‘Difficult Decisions’ to Restore Profits

Southwest Airlines Co. has warned employees that it will announce some tough decisions in coming days under a plan to restore profits and help fend off changes being demanded by activist Elliott Investment Management.

Steps the carrier has already announced, including ditching a 50-year history of not assigning seats, offering a premium product and beginning red-eye cross-country flights, aren’t sufficient to improve its finances to the extent needed. That’s driving plans to eke out more revenue through changes to its route and flight network, Chief Operating Officer Andrew Watterson told employees in a video.

“There are some difficult decisions ...