Southwest Airlines, the budget carrier known for its open seating policy and lack of assigned seats, is considering making significant changes to its business model. The airline's CEO, Bob Jordan, has revealed that they are studying customer preferences regarding seating and the cabin in depth. This potential shift could mark a major transformation for Southwest Airlines since it began operations in 1971.
The financial pressures on Southwest have been mounting. In the latest quarter, the airline reported a net loss of $231 million. To improve its financial position, Jordan is considering changes to the boarding and seating processes on its planes. The carrier's all-Boeing 737 fleet features a single economy class cabin with open seating assignments.
Southwest has been underperforming financially due to Boeing delays and the resulting aircraft delivery issues. The Federal Aviation Administration ramped up oversight of Boeing and its supplier Spirit AeroSystems, which led to production halts for the Max 9 jets. This situation forced Southwest to exit multiple underperforming airports.
The open seating policy has been a hallmark of Southwest Airlines since its inception. Passengers are currently assigned boarding groups but can choose any available seat once onboard, and they can pay extra to board early for preferred seating. However, with the increasing popularity of premium seats and assigned spots among travelers, Southwest may be considering introducing these features to attract a younger generation of customers and boost revenue.
Southwest is not alone in this trend. Delta Air Lines and United Airlines have reported strong revenue growth from their premium seating offerings. The airline industry as a whole has seen significant upsell rates for these products, with eight major U.S. carriers generating $4.2 billion in seating fees from domestic networks in 2022.
Despite the potential changes, Southwest executives have ruled out two possibilities: baggage charges and installing curtains like those that separate premium cabins from economy-class sections on other airlines.