Southwest Airlines will soon assign seats on flights and sell some with extra legroom, making sweeping changes in a bid to broaden its appeal to passengers and boost revenue. The plans, announced Thursday, also come as it fends off an activist investor pushing for an overhaul of the airline’s leadership and operating strategy. Open seating has been a hallmark of Southwest flights since the carrier got its start over 50 years ago.
It was part of a business model that produced decades of uninterrupted profits and democratized flying in the process. But Southwest executives said that the company needs to adapt to what today’s customers want. “This is the right change at the right time," Southwest Chief Executive Bob Jordan said in an interview.
It isn’t clear when flying with assigned seats and premium rows will start, but Southwest said bookings for them are expected to begin next year. The exact timing of the changes depend on the airline gaining regulatory approval and retrofitting its planes. It expects to share more details at an investor presentation in late September.
Southwest also plans to operate red-eye flights for the first time starting next year. The carrier has been facing challenges on a range of fronts. Its profit margins have lagged behind many rivals and pulled back from some new cities it entered as part of an ambitious expansion strategy.
Other airlines are also grappling with too many empty seats on U.S. flights and weaker fares, but Southwest doesn’t have the vast international network and high-end offerings that have offset those problems for rivals. Through Wednesday its share price this year is down about 7.9%, compared with a 14% gain in the S&P 500.
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