The Daily Populous Friday July 26th, 2024 night edition
Authored by cnbc.com and submitted by subaru5555rallymax

Southwest Airlines is ending open seating and will offer extra legroom seats on its airplanes as mounting pressure on the carrier to increase revenue prompts the biggest changes to its business model in its 53 years of flying.

The airline plans to start selling the first flights that will offer extra legroom next year, it said Thursday. It also plans to begin overnight flights, starting in February.

Southwest executives have said for years that they were studying such changes and hinted in April that the airline was seriously considering assigning seats and offering extra legroom options. The airline currently puts customers in one of three boarding groups and assigns a number, setting off a mad dash to check in a day before the flight. Customers can get earlier boarding though if they pay for a higher-priced ticket, they'll get a better boarding slot.

When travelers choose a competitor over Southwest, the airline found in its research that its open seating model was the No. 1 reason for that choice, the carrier said in a release that outlined the changes. It also said 80% of its own customers prefer an assigned seat.

"Although our unique open seating model has been a part of Southwest Airlines since our inception, our thoughtful and extensive research makes it clear this is the right choice — at the right time — for our Customers, our People, and our Shareholders," CEO Bob Jordan said in a news release Thursday.

Jordan added during the company's second-quarter earnings call that the decision stemmed from a change in broader customer preferences and travel patterns, and Southwest's desire to grow its market share with corporate business travelers.

"Customers are just taking fewer short haul trips today. They're flying longer, and when they fly longer, the importance of an assigned seat goes up," Jordan said. "Premium product growth has outpaced growth in Main Cabin revenue for some time here, and in other parts of the economy consumers are just reducing non-essential retail purchases and spending that on experiences."

Southwest is not, however, looking to change its beloved two free checked bags policy. After fares and schedule, the carrier's "bags fly free" policy is the No. 1 reason why customers choose Southwest over competitors, Jordan said on the call.

The airline is under even more pressure now to segment its product like other airlines after activist investor Elliott Investment Management disclosed in June a nearly $2 billion stake in Southwest and called for new leadership as the carrier underperformed competitors.

Southwest reported second-quarter earnings Thursday that showed profit down 46%.

-OptimisticNihilism- on July 25th, 2024 at 12:08 UTC »

[The airline is under even more pressure now to segment its product like other airlines after activist investor Elliott Investment Management disclosed in June a nearly $2 billion stake in the airline and called for new leadership as the airline underperformed competitors.

“We will adapt as our customers’ needs adapt,”]

I think he meant to say for his investors.

SwiftCEO on July 25th, 2024 at 11:57 UTC »

It wouldn’t surprise me if they got rid of the included checked bags next.

arctander on July 25th, 2024 at 11:39 UTC »

Perhaps they ought to create an incentive to sit in the middle seat instead.