Southwest Airlines has revealed more details about its business-overhaul plan, saying it will abandon its open-seating model in 2026, form partnerships with other airlines and begin charging for “premium” coach seats.
The Dallas-based airline, under pressure from investors to boost profits during a tough environment for US low-cost carriers, will start selling assigned seats in the second half of 2025, and begin operating flights with assigned seats in the first half of the following year, Southwest said on 26 September.
“We’re now ushering in a new era at Southwest, moving swiftly and deliberately to transform the company by elevating the customer experience, improving financial performance and driving sustainable shareholder value,” says Southwest chief executive Bob Jordan.
The airline intends to continue its policy of allowing customers to check two bags for free.
The seating changes, not unexpected, will end an open-seating policy that has long set Southwest aside from competitors. It will allow the company to generate more money by selling “premium” seats in the all-coach cabins of its all-Boeing-737 fleet, Southwest says.
The low-cost carrier’s transformation plan also calls for “minimising hiring, optimising scheduling efficiency, capitalising on supply chain opportunities and improving corporate efficiencies” – with a goal of saving $500 million annually by 2027.
Also on 26 September, Southwest said Robert Fornaro, former CEO of Spirit Airlines and of AirTran Airways, had joined its board of directors.
Long one of the USA’s most-profitable airlines, Southwest’s financials have sputtered of late, with the company turning a $137 million profit in the first half of 2024, down 74% year on year. The airline has been hampered by delayed deliveries by Boeing of 737 Max, and by broader industry pressure, which some executives attribute to excess capacity of seats on ultra-low-cost airlines.
Southwest says its planned cabin-seating changes are based on “data-driven research” showing that 80% of its customers – and 86% of competitors’ customers – prefer assigned seats.
“Seat assignments are a higher priority on long-haul flights,” the airline adds, noting its flies more longer-distance flights than previously.
As part of the overhaul, Southwest will also sell “extra-legroom” seats (with up to 5in of additional space), which will “drive demand and… generate more revenue per passenger”.
Changes are also coming to Southwest’s boarding process. The company will allow its “most-loyal customers” and fliers who purchase premium seats to board first, while retaining its current process, for other passengers, of boarding based on “position numbers”.
“We’ve spent the past few years laying a foundation that serves as the base of our transformation,” says Southwest executive vice-president of commercial transformation Ryan Green. “We’ve already started rolling out modernised cabins with improved wi-fi, in-seat power, larger overhead bins, enhanced operational efficiencies and optimised flight schedules.”
Southwest also plans to add overnight “red-eye” flights in February 2025, and will work to turn its jets around quicker between flights.
The management team has also decided to expand Southwest’s “global” reach by forming partnerships with other airlines – deals that will allow it to funnel passengers onto other carrier’s flights. Southwest says Icelandair will be its first partner, in 2025, when those airlines plan to begin coordinating flights at Southwest’s Baltimore/Washington International airport hub. Southwest intends to partner with one other airline next year, it says.
Additionally, the airline in 2025 plans to launch a vacation-package product called Getaways by Southwest.
