Southwest Airlines is making major changes as it begins to offer services akin to standard non-budget airlines.
On Thursday, Southwest Airlines unveiled plans to implement assigned seats and add premium seats with longer legroom. Those with premium seats will now be able to board first, the airline says. The airline says it will still continue to allow customers to check up to two bags for free as it says any change in policy would lower revenue.
“We’ve spent the past few years laying a foundation that serves as the base of our transformation,” said Ryan Green, Southwest Airlines executive vice president of commercial transformation. “We’ve already started rolling out modernized cabins with improved WiFi, in-seat power, larger overhead bins, enhanced operational efficiencies, and optimized flight schedules. We will continue to build upon our unique competitive advantages, while adapting to consumer priorities in today’s dynamic environment.”
The airline said it expects to gain $4 billion in earnings over the next three years with the changes.
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Research from the airline shows 80% of Southwest customers and 86% of potential customers prefer an assigned seat. And when customers opt to stop flying with Southwest in favor of a competitor, the No. 1 reason they cite leaving is open seating.
Another major change won’t be to the aircraft, but rather scheduling. The airline said it would begin offering redeye flying in key markets to maximize aircraft utilization in February. The airline also said it would aim to further reduce the time it takes to turn an aircraft, increasing its fleet’s productivity.
Southwest Airlines is making these changes as its stock has lost half of its value since 2021. Traditional full-service airlines United and Delta have largely maintained their value in recent years.
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Frontier and Spirit, two other major budget airlines, have struggled to compete in the last few years as their values have plummeted over time.
