Southwest Airlines is gearing up for a major overhaul of its longstanding business model.
The carrier, known for its no-frills approach, plans to introduce assigned seating and extra legroom options starting in 2025.
This marks a significant shift for the airline that has stuck to its simple formula for over 50 years.
The changes come as Southwest faces mounting pressure to boost its revenue.
In June, activist investor Elliott Investment Management took a $2 billion stake in the company, calling for new leadership amid concerns about the airline’s performance compared to its competitors.
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Southwest CEO Bob Jordan acknowledged the need for change at a recent industry event.
“We will adapt as our customers’ needs adapt,” he said.
Yes, the rumors were true. @SouthwestAir will start ASSIGNING SEATS next year, and about a third of seats will be higher cost extra legroom. And gone will be the current boarding scrum.
Oh, and redeye flights are coming. https://t.co/Mc8Ew9cmcJ
— Jason Rabinowitz (@AirlineFlyer) July 25, 2024
This signals a departure from the airline’s traditional stance, which had previously been a reliable source of profits.
The Dallas-based carrier is also planning to launch overnight flights, further expanding its service offerings.
These moves align Southwest more closely with industry norms, as rival airlines have long offered various seating upgrades and premium options to increase revenue.
Some analysts argue that Southwest has been slow to evolve.
However, the airline’s influence on the industry is clear.
Major competitors like Delta, United, and American followed Southwest’s lead four years ago by eliminating change fees on most tickets.
Southwest’s decision to alter its model reflects the challenges of modern air travel.
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Veteran Southwest Pilot on Diversity Push: "a core tenet of commercial aviation is to avoid distractions and prioritize tasks that foster a safe flight. Now, the company is… pic.twitter.com/977sjvFF1k
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With planes flying fuller than ever, the company’s open seating policy has become less practical.
The airline aims to strike a balance between maintaining its customer-friendly reputation and meeting the demands of today’s market.
More details about these changes are expected at Southwest’s investor day in late September.