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Southwest Airlines on Thursday announced changes to its long-standing business model in hopes of reversing turmoil caused by declining profits and a sagging stock price.
The Dallas-based airline said in a press release that it is pivoting away from the so-called open-seat model, charging a premium for the best seats and offering overnight flights.
“Southwest is now navigating a new era as we move quickly and deliberately to transform the company by enhancing our customer experience, improving financial performance and driving sustainable shareholder value,” Bob Jordan, Southwest's president, CEO and vice chairman of the board of directors, said in a statement.
The airline described the overhaul as an “evolution” driven by customer research into the changing needs and expectations of travellers.
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Southwest said most customers surveyed want to know their seat assignments when they board, rather than choosing from available seats. (Kevin Carter/Getty Images, File/Getty Images)
Southwest Airlines said 80% of customers surveyed would like to be assigned a seat before arriving at the airport, rather than having to choose one when they board. The airline plans to start operating flights with the new model in the first half of 2026.
Southwest Airlines has announced that it will keep its standard economy seats for travelers who prefer extra legroom, but will allow customers to purchase premium seating options.
Southwest Airlines said it was not changing its “free checked baggage” policy. (Scott Eisen/Bloomberg via Getty Images, File/Getty Images)
Southwest Airlines is known for its “fly free bags” policy, which allows customers to check two bags for free, and has confirmed that there are no changes to this popular service.
“Our thorough review confirms that Southwest's free checked baggage policy remains the most important feature differentiating Southwest from other airlines,” the company said.
Southwest Airlines hopes the announced changes will help stem the decline in profits. (Photo by Daniel Slim/AFP via Getty Images, File/Getty Images)
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Southwest said it plans to begin offering late-night flights in “key markets” starting in February 2025. The airline did not specify which markets in its press release.
The changes come as the airline faces pressure from activist investor Elliott Management to boost profits.
| Ticker | safety | last | change | change % |
|---|---|---|---|---|
| i love you | Southwest Airlines | 31.18 | +2.79 |
+9.81% |
The airline's chief operating officer, Andrew Watterson, informed employees in a video on September 19 that changes are coming to the company. Bloomberg reported: I will quote the record.
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“We have some tough decisions ahead,” he said, telling staff that “bigger changes” are on the way for some cities that “are not just about closing cities.”
