Southwest Airlines has announced a significant change to its long-standing open seating model, opting to assign seats before all flights and introducing premium seating options. This decision marks a departure from the airline's 57-year tradition of open seating, where passengers select their seats upon boarding.
The shift in policy is part of Southwest's strategic efforts to enhance financial performance, shareholder value, and overall customer experience. The move comes in response to pressure from activist investor Elliott Investment Management, which holds a substantial stake in the airline and has been advocating for operational changes, including a new CEO and revised business practices.
Research conducted by Southwest revealed that a majority of customers, 80%, and potential customers, 86%, prefer an assigned seating system over open seating. The company noted that the primary reason passengers opt for competitors is the open seating model, prompting the shift in strategy.
In addition to assigned seating, Southwest will introduce premium seating options with extended legroom, potentially allocating up to one-third of the cabin to these seats. CEO Bob Jordan described the move as a 'transformational change' that will impact various aspects of the company.
Furthermore, Southwest will expand its operations to include 24-hour service starting in February of the following year, offering new overnight redeye flights to passengers.
The announcement of the seating policy changes coincided with Southwest's report of a significant decline in profits for the second quarter of the year. The airline's net income for the quarter dropped to $367 million from $683 million in the same period the previous year. Despite the profit decrease, Southwest saw a record revenue of $7.4 billion for the quarter.
