Southwest Airways Co. will start providing assigned seats, ditching the free-for-all coverage that has been a defining characteristic of the provider for greater than half a century.
The airline introduced the seismic change to its enterprise mannequin Thursday alongside a brand new premium-class possibility and plans for redeye flights. Whereas Southwest indicated earlier this yr that it was reconsidering the seating coverage, it’s now dealing with heightened strain to revamp underperforming operations from activist investor Elliott Funding Administration.
The steps symbolize a strategic shift for the provider, which has steadfastly maintained open seating whereas different airways raked in income by charging additional for more-desirable seats. That unfulfilled alternative is a significant tenet of Elliott’s marketing campaign — that Southwest has refused to modernize its enterprise to attraction to at this time’s vacationers.
Adoption of premium seating might open the door for the provider — which has lengthy appealed primarily to leisure vacationers — to probably supply business- and first-class sections sooner or later.
Southwest nonetheless gained’t cost for checked baggage. The “baggage fly free” coverage has been a focus of Southwest promotions and commercials, and a few analysts have speculated charging for luggage might price the airline prospects. It’s the one US provider that doesn’t impose charges to test two.
Southwest will start providing assigned seats and premium seating with extra legroom subsequent yr. It should begin flying in a single day, cross-country routes on Feb. 13. These flights are on the market from Las Vegas, Los Angeles and Phoenix to Baltimore/Washington Worldwide Thurgood Marshall Airport; Las Vegas to Orlando; and Los Angeles to Nashville.
Particulars on which seats will carry charges and the additional price are nonetheless being determined, Southwest stated. All seats can be assigned, however there gained’t be a separate cabin for premium choices. The provider has studied varied seating choices up to now, however all the time rejected a shift to assigned spots, saying passengers didn’t assist such a transfer.
Latest Modifications
Whereas Southwest has lengthy stood by a few of its central insurance policies, it hasn’t been fully resistant to vary. It started routes to close by worldwide locations and, extra not too long ago, added flights to Hawaii. The airline beforehand revamped its boarding system, provided early boarding choices at a further price and developed a company reserving instrument to win extra enterprise vacationers.
Southwest stated in April that it had begun evaluating premium merchandise and others modifications, nicely earlier than Elliott disclosed a $1.9 billion stake final month. However till Thursday, the airline stated it wouldn’t disclose any particulars till an investor assembly slated for September.
Elliott desires to oust Chief Government Officer Bob Jordan and Chairman Gary Kelly for poor execution and a “cussed unwillingness to evolve the corporate’s technique.” They’re “lower than the duty of modernizing Southwest,” the activist has stated.
Southwest earlier this month named a veteran airline business government to its board to assist tackle different issues raised by Elliott. The provider additionally adopted a “poison tablet” shareholder rights plan to discourage the activist from gaining a bigger share.
