Southwest Airlines is saying goodbye to its famous open seating plan.
Farewell to Free-for-All
Southwest is officially ditching the free-for-all seating arrangement in favor of assigned seats and extra-legroom options. It’s the end of an era for a policy that has been a huge part of the airline’s brand for over 50 years now.
Legroom Lottery
For decades, Southwest Airlines’ open-seating model has been its defining feature. This system allowed passengers to choose their seats on a first-come, first-served basis – which admittedly often led to a scramble for the best spots. But no more.
Seat Strategies
The seating policy has seen travelers coming up with wild strategies to secure the “best” seats on a flight, but it’s soon to be a thing of the past.
Assigned Seating Takes Off
Instead, you’ll be given a specific seat when you book – just like with other airlines. You’ll also have to cough up some extra cash if you want more space to stretch your legs.
Turbulent Times
But why such a sudden change? Well, Southwest has been struggling with its finances lately. The airline has been hit hard by rising costs, competition, and some poor quarterly results.
Boeing’s Big Impact
On top of that, Southwest took a massive hit after Boeing couldn’t deliver its new planes on time. This forced the company to pull out of four major airports and lay off 2000 staff members.
Profits in a Tailspin
All of this had an effect on Southwest’s profits, which took a nosedive last quarter and ended up landing at just 58 cents per share – roughly half of what they made the year before.
Shareholders Unhappy
This has all been a big blow to the company’s operations and finances, and isn’t the kind of news that will impress shareholders.
Summer Surge
Despite a booming summer travel season this year and an increase in share value, the airline is still struggling to recoup its losses.
The Rationale Behind the Revamp
Southwest’s CEO, Bob Jordan, explained that, “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.”
The Numbers Don’t Lie
According to the airline, 80% of current customers and 86% of potential customers prefer having assigned seats – especially on longer flights.
Legroom for Sale
Assigned seating isn’t all that’s changing. Southwest is following in the wake of Delta, United, and American Airlines and rolling out seats with extra-legroom for the first time.
Looking Towards Delta
These are expected to make up about a third of the cabin, and the airline is likely hoping to see a massive revenue increase from these premium seats, much like Delta last quarter.
Streamlining Boarding
The airline is also changing its boarding process. Instead of the old system – where passengers lined up by numbered posts – there will be a new streamlined approach. This should make boarding quicker, but it’s also another sign that Southwest is moving away from its laid-back origins.
One Thing That’s Not Changing
One of the things Southwest is known for is offering two free checked bags, and the company was quick to confirm they’re not planning any changes to that policy. As Southwest continues to adapt, expect more changes down the line.
Investors Buckle Up
Southwest’s stock was up 4.2% in premarket trading, which shows that investors are optimistic about the new direction.
Travel Boom Meets Market Crunch
This all comes at a time when airlines are seeing a boom in travel, as millions of people flock to the airports.
Charting a New Course
The domestic flight market is getting crowded, which means airlines need to find new ways to stand out and make money. This pressure is driving Southwest to change how they do things.
Will Passengers Pay?
Southwest Airlines is entering a new chapter with these sweeping changes. Whether this will boost their financial performance remains to be seen, but with the airline business constantly changing, Southwest needs to figure out how to keep up.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
