For quite some time, there have been rumors of Southwest Airlines radically transforming its business model. Well, it’s finally happening, as Southwest has announced some major changes today, which are long overdue, if you ask me…
In this post:
Southwest overhauling its seating policies
While details are still limited as of now, Southwest Airlines has announced that it’s introducing both assigned seating and premium seating. We don’t yet know when the new seating concepts will be introduced, or what exactly these updates will look like.
What we do know is that all seats will be assigned, and that over time, roughly one-third of seats across the fleet will offer extra legroom, and will be branded as premium seating. The airline is still working on designing exact cabin layouts. I’ve written in the past about some surveys that Southwest customers were getting, which should give you a sense of the changes we may see.
Southwest has been known for its unique open seating model for more than 50 years, but the airline believes that consumer preferences have evolved, with more customers taking longer flights, where a seat assignment is preferred.
Southwest claims that according to its research, 80% of Southwest customers and 86% of potential customers prefer an assigned seating concept. When a customer elects to stop flying with Southwest and chooses a competitor, open seating is cited as the number one reason for that.
With this change, Southwest believes it will broaden its appeal and attract more flying from its current and future customers. The airline states that this is part of the overall modernization efforts at the airline, and complements plans to introduce faster Wi-Fi, in-seat power, larger overhead bins, and more.
Interestingly these are the only core changes to the passenger experience that have been announced as of now. There are also rumors of Southwest introducing something along the lines of basic economy, though that hasn’t been announced… yet.
Here’s how Southwest CEO Bob Jordan describes these seating changes:
“Moving to assigned seating and offering premium legroom options will be a transformational change that cuts across almost all aspects of the Company. 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. We are excited to incorporate Customer and Employee feedback to design a unique experience that only Southwest can deliver. We have been building purposefully to this change as part of a comprehensive upgrade to the Southwest experience as we focus on Customer expectations – and it will unlock new sources of revenue consistent with our laser focus on delivering improved financial performance.”
These Southwest changes were inevitable
I don’t think it should come as a surprise to anyone that Southwest is finally updating its business model.
For decades, Southwest was one of the most profitable US airlines, but the carrier has lost its financial edge, as consumer travel patterns have shifted. Southwest isn’t able to capitalize on the premium travel boom, plus the demand for long haul travel. The airline also hasn’t been able to generate as much ancillary revenue as competitors, which is a major source of profit for airlines.
So in recent months, Southwest management has made it clear that the airline is open to making changes to its business model. The only thing that the airline is committed to keeping is two free checked bags, because Southwest management views this as being a key part of the carrier’s value proposition.
I’d say both of these updates are logical. Assigned seating is much easier to monetize, and also less frustrating for many passengers, since they know exactly what they’re going to get.
As far as premium seating goes, that also makes perfect sense. A while back, Southwest unveiled new cabins, which will be installed on newly delivered aircraft as of 2025. What’s interesting is that these seats are thinner than existing seats, yet Southwest at the time stated it wouldn’t increase the number of seats on planes.
Airlines aren’t charities (even if their balance sheets may at times suggest otherwise), so it makes sense that Southwest would try to monetize the extra space, and change the cabin layout a bit.
It’s good to see Southwest evolving
As I mentioned at the beginning of this post, Southwest has probably been the most consistent airline over the years in terms of not changing its business model, regardless of what competitors are doing. The US global legacy carriers have evolved to become more profitable, better competing with ultra low cost carriers, by increasingly fragmenting the market.
Meanwhile Southwest has just kept doing what it has been doing for decades, and has been one of the better performing airlines over the years. I think some people fall into the trap of thinking that if an airline is profitable and does a certain thing, that must mean that it’s the right thing to do. In many cases, airlines are profitable in spite of certain business practices, rather than because of them.
I think what has kept Southwest profitable over the years compared to other primarily domestic airlines is the scale of its network, its fleet simplicity, and the high engagement in its loyalty program, thanks largely to a pleasant flying experience and friendly staff.
The airline has high labor costs, and greatly lags other carriers when it comes to ancillary revenue. Personally I think it’s smart for Southwest to finally focus on generating ancillary revenue. I’m sure many Southwest loyalists won’t be happy about these changes, but I do think it’ll ultimately improve Southwest’s bottom line.
Bottom line
Southwest Airlines has finally revealed that it plans to introduce assigned seating on all flights, and also plans to introduce a premium seating option, with extra legroom. This evolution at Southwest was bound to happen, given the carrier’s current financial performance.
Exact details of what these changes will look like remain to be seen, but the airline is now committed to these updates, so let’s see how this all plays out.
What do you make of Southwest introducing assigned and premium seating?
I wish WN well. The airline is iconic in the industry, and many airlines around the world have used their template.
As for the changes, I have no doubt they did huge amounts of research and surveys to reach this conclusion. The change is logical, as it must be designed to gain/attract more revenue from the more premium passenger segments. Basically it will result in a better revenue management mix of the aircraft.
I suspect...
I wish WN well. The airline is iconic in the industry, and many airlines around the world have used their template.
As for the changes, I have no doubt they did huge amounts of research and surveys to reach this conclusion. The change is logical, as it must be designed to gain/attract more revenue from the more premium passenger segments. Basically it will result in a better revenue management mix of the aircraft.
I suspect that baggage and other ancillary fees, or lack thereof, will likely not result. Changes to those fees would become a game changer...but not to be ruled out in the years ahead.
Finally, I hope and have confidence that WN has fully evaluated the IT systems and staff training to make this change possible. To me, IT & staff capability would be of strategic priority making this change.
And likely their marketing department will have to dive deep on this change...
PS - as for red-eyes....good for them...and good for the flying public. As the saying goes, an aircraft doesn't generate revenue if not in the air.
Crew scheduling and such I have no clue about...but it would have been considered...
I fly Southwest domestically more frequently than any other US airline because:
A) I often fly out of BWI and Southwest is the dominant airline, carrying ~70% of passengers out of BWI as of 2022.
B) Southwest goes to some of those second and third tier locations that are not always covered by the Big 3, e.g., Hartford, CT.
C) I love the bags fly free policy and in my experience, it...
I fly Southwest domestically more frequently than any other US airline because:
A) I often fly out of BWI and Southwest is the dominant airline, carrying ~70% of passengers out of BWI as of 2022.
B) Southwest goes to some of those second and third tier locations that are not always covered by the Big 3, e.g., Hartford, CT.
C) I love the bags fly free policy and in my experience, it seems to contribute to smoother boarding. (People seem to be more willing to check a bag if they aren't being charged extra, which cuts down on delays while people are forced to gate check bags.)
I liked Southwest's open seating, but I'm fine with this too.
I would, however, be upset if they got rid of bags fly free. That is a core piece of the Southwest value proposition. So if Southwest wants to jump on the ancillary revenue train, seat selection is the way to do it.
Thanks Ben for the updates. I have never flown them in 50 years. Maybe this will get me onboard ✈️
Good to see. Finally. About time. Why no details? Sounds like "The way we've always done it" is no longer the management philosophy.
I say ditch the extra legroom as a 'premium' option (it's not) and got with wider seats up front. That means fewer seats. Doesn't need to be a true first class product (does that even exist in this day and age?!), but 2x2 seats up front will be a game changer. Spirit has done tremendous with that Big Front Seat as people definitely want that wider more comfortable seat, even with limited legroom. Calling extra...
I say ditch the extra legroom as a 'premium' option (it's not) and got with wider seats up front. That means fewer seats. Doesn't need to be a true first class product (does that even exist in this day and age?!), but 2x2 seats up front will be a game changer. Spirit has done tremendous with that Big Front Seat as people definitely want that wider more comfortable seat, even with limited legroom. Calling extra legroom seats "premium" is just lazy and don't create any better of a product. The width is by far what actually creates a premium product. I'd fly them in a heartbeat if they came up with 2x2 seating up front. of course they kinda need to stop near-crashes of their planes. Oh wait, they fly the MAX...never mind.
What a strange coincidence that all this market "research" and policy changes are coming on the heels of a huge buy-in by private equity, losing the specificity of what made Southwest successful for many years (not to mention the fastest boarding process available).
One can imagine charges for every type of assigned seat and group while maintaining a last group "cattle call" as a basic economy style fare that can't carry on bags without...
What a strange coincidence that all this market "research" and policy changes are coming on the heels of a huge buy-in by private equity, losing the specificity of what made Southwest successful for many years (not to mention the fastest boarding process available).
One can imagine charges for every type of assigned seat and group while maintaining a last group "cattle call" as a basic economy style fare that can't carry on bags without a fee and won't earn points.
PE will extract their money, Southwest will be just like everyone else and lose a loyalty base, slow their turnaround times, and will need a big investment in new tech to handle the reservations.
Let's see what their appeal is to the general public - as a rare Southwest flier, these changes aren't magically making me want to fly with them!
I am thrilled. I had not considered WN in the past primarily because of the " Festival Seating" policy. Way to much uncertainty and hassle. Tampa is my home airport and WN has a number of nonstops from here to places I wish to travel too. Another travel option has opened for me. Cool !
Wish I could be there to watch the faces of those fake “early boarders” whose ailments are magically healed at the end of the flight.
THAT is what is out of control at Southwest.
As long as they continue to serve their routes, have decent loyalty programs, and be on time I am a firm loyalist.
For the routes I fly, WN charges far more miles than AA, and it is no longer the price leader in cash fares on most routes. I loved WN when it was the price leader, but those days are long gone. At the same time, it’s not going to attract me with Basic Economy, either. I’ll use my remaining miles when reasonable, but I don’t see Southwest much in my future.
Shrinkflation.
I preferred open seating!!!! I was never surveyed.
Not that it matters, their research showed that assigned seating was by far the #1 thing preventing their growth by competitive churn.
With new investors coming in and expecting change, that was an easy one for management to deliver. It was only a matter of time.
When WN finally implements assigned seating, US airports will suddenly have a surplus of wheelchairs.
“Airlines aren’t charities (even if their balance sheets may at times suggest otherwise)”… lol!
In addition to what everyone else has mentioned so far, changing to assigned seating will free up another 100-200 sq.ft. of floor space at every Southwest gate by removing those numbered pylons. More room for seating, and maybe less inconvenience for families whose kids can’t stay still while lining up, those who have difficulty standing for prolonged periods, etc.
Good, ending open seating fixes multiple problems with Southwest.
It really doesn't, open seating actually made their process of loading and unloading passangers faster than other airlines.
Unloading? What planet do you live on?
Loading? Every other airline has figured out how to get passengers on board and managing aircraft utilization. Southwest can learn also.
It takes a huge leap of faith to change your entire business model, so kudos to them for listening to what consumers have been asking for and making that change.
I do worry that they may not see the results they think they will, because I think a lot of the reason that they haven't been able to cash in on the travel boom is not their product, it's because they don't fly where...
It takes a huge leap of faith to change your entire business model, so kudos to them for listening to what consumers have been asking for and making that change.
I do worry that they may not see the results they think they will, because I think a lot of the reason that they haven't been able to cash in on the travel boom is not their product, it's because they don't fly where the travel is booming. After being stuck in the U.S. for a few years during the pandemic travel rebounded a lot by people traveling internationally, which Southwest doesn't do (I know they do Carribean and central American, but I'm talking Europe and Asia), so they weren't positioned to capture the market, and this move still doesn't change that.
There is likely still a decent segment of the population that collects miles to travel overseas, and thus Southwest still won't work for them, but that's probably not as huge of an issue as it once one as I think a lot of us are more airline agnostic than we once were since the frequent flier programs have been largely gutted, but for any hardcore mileage nerd this change still won't capture them.
I never flew them because of the assigned seats, because they didn't fly overseas, and because the few times I did check them for domestic flights they were SIGNIFICANTLY more expensive than the majors, with the assigned seats issue fixed, if they can get the prices in line with the majors then I'll consider them for domestic travel, but I'm not holding my breath.
I appreciate all of Lucky's arguments for the merits of this change, but I for one will mourn the loss of open seating. My perspective on the policy changed when our family had kids. Southwest has been the best for families for two reasons:
1. You can book inside of a week and still get seats together as a family without having to bank on United's algorithm or begging a gate agent (DL) because of...
I appreciate all of Lucky's arguments for the merits of this change, but I for one will mourn the loss of open seating. My perspective on the policy changed when our family had kids. Southwest has been the best for families for two reasons:
1. You can book inside of a week and still get seats together as a family without having to bank on United's algorithm or begging a gate agent (DL) because of Southwest's family boarding policy. Over the last week, this has been stark. Every mainline airline has single available seats scattered all over the seatmap. On southwest, we'll sit together.
2. Because of the family boarding policy, all families board around the same time and tend to sit near each other on the plane (my experience is generally right behind the exit row). Traveling with a kid is stressful, and it lowers the stress to have other families dealing with crying, blowouts, peeking over seatbacks to say "hello", etc sitting nearby. It is a low-key, forgiving place of chaos on the plane.
I go out of my way to choose southwest when booking last minute and often pay more to do so for these reasons. I won't anymore.
They really need a domestic F product now, or Business Select is completely worthless. (It's value was always highly questionable anyway.) I think they'll have to go with Euro-business (empty middle seat) until they can get the planes retrofitted.
Yea I'd like to see F seats. They can copy Spirit's model.
What about wheelchair passengers? Will they also have to book an assigned seat? What if it’s in row 18 or something like that? Are we expected to walk all that way to our assigned seat?
With assigned seating, why would that happen any differently than on other carriers?
On Southwest you would board first as a wheelchair passenger and you would pick the seat in the front.
Presumably seat 2A is going to be at a different price than 28B. It doesn't make sense to have assigned seating and not monetize seats that are typically considered more preferrable.
If someone doesn't want to walk to the back of the plane they could pay "$$$" for a seat towards the front.
This makes me sad. Not because I particularly love Southwest's model (nor do I hate it) but because it demonstrates that there's no place for different business models. The worst model -- in this case, unbundling everything and converting most revenue into "ancillary" revenue -- has taken over the industry.
It would be nice if there were a choice among the-price-is-the-price airlines like Southwest, nickle-and-dimers like the other majors, and penny-pinchers like the ones that...
This makes me sad. Not because I particularly love Southwest's model (nor do I hate it) but because it demonstrates that there's no place for different business models. The worst model -- in this case, unbundling everything and converting most revenue into "ancillary" revenue -- has taken over the industry.
It would be nice if there were a choice among the-price-is-the-price airlines like Southwest, nickle-and-dimers like the other majors, and penny-pinchers like the ones that charge for drinks. But the logic of price advertising dictates that all-in pricing can't compete. Sure, Southwest says they're keeping their free bag policy for now but Ben's analysis makes it clear that it's the "wrong" decision in the long run.
I believe two things are true: the airline advertising the lowest price will "win", but that airlines with all-in pricing provide a better customer experience. Well over half the questions in public airline fora (like the AA Facebook groups) are things like "are seat selection fees refundable?" and "Do I have to pay with the credit card to get the free bag?". In this situation the market works to the benefit of the seller, but not so much for the consumer.
You might find this an interesting explanation in part: https://en.m.wikipedia.org/wiki/Hotelling%27s_law
More leg room with thinner seats? I’d much prefer wider more cushioned seats with space between them and with some recline. That would be worth the upgrade in price.
I wonder how the assigned seating will affect the boarding process. No more A, B, C groups? Will things slow down and turn into the mass free for all like on AA where everyone tries to board right away even though they're in Group 5+
Surely the boarding process, like the on-board experience, will be just like every other airline.
They have removed the first barrier. The second is that, from my home airport, they are often more expensive. The third is they only seem to offer too early or too late flights when they are price competitive. They offer two non-stops to a city in Florida. You either fly out at 6am or arrive at 9:30 pm.
This will probably ease the cost problem since the nickle-and-dime model allows publishing lower base fares and making it up on ancillary revenue. The lower-level fares (with limited or no seat selection) will probably come down to the level of their competitors.
A bad move from WN, putting its bottom line over the interests of passengers in having affordable tickets.
Clearly you missed that part about them not being a charity.
First, it's not clear yet if this might mean some passengers will get cheaper airfare (measured net of all fees). Second, in running your business you are not interested in net profit?
WN is more expensive than any route that they and AA offer out of DAL/DFW. They are the charging premium fares for a spirit like experience. I dont need to pay $100 extra to fly WN if i dont have checked bags and even if i do they are comped anyways with amex or other cards. Flying WN is as bad or worse than NK but at least NK is cheap. I love these moves for WN i might actually fly them next time over AA.
At least regarding DAL/DFW, I presume people are willing to pay more on Southwest for the convenience of flying into Love, closer to downtown Dallas, as opposed to having to deal with DFW. It was the same thing when I lived in Houston - Hobby was more convenient than IAH - a 15-20 minute drive versus 45-80 minutes.
What will happen to their Extra Seat Policy for large passengers?
I assume that will go away too.
One thing maybe Southwest could experiment with is empty middle seats for Business Select passengers, which would provide value to other customers while still giving an option to obese passengers that's likely cheaper than buying two seats.
Was able to offer cheaper flights and 2 bags because they got long-term fuel hedges right decade plus ago. People were willing to deal with open-seating due to lower pricing and flexible ticketing. Post-pandemic all/nearly-all mainline carriers offer flex and are often cheaper; WN lost their advantage.
exactly.
I think the drive to assigned seating came about as people realized that by pretending to be "disabled" they could scam the system for have the pick of their seat. Assigned seating will negate that abuse.
Another aspect (and I think more common) is that if you were traveling in a group, you only needed one person to upgrade to A list seating, then that person could save seats for everyone.
Southwest is totally right that the lack of assigned seating is driving people to competitors. Open seating is fine when I travel alone, but as the travel group becomes bigger, it gets quite frustrating to do. At this point the gf avoids Southwest when we're traveling together because for the kind of people who get anxious while flying it really does wear on the nerves. From getting antsy waiting in queue to board, trying to...
Southwest is totally right that the lack of assigned seating is driving people to competitors. Open seating is fine when I travel alone, but as the travel group becomes bigger, it gets quite frustrating to do. At this point the gf avoids Southwest when we're traveling together because for the kind of people who get anxious while flying it really does wear on the nerves. From getting antsy waiting in queue to board, trying to be up and ready to get in line ASAP, and then the awkward seat selection itself, it is understandably stressful and frustrating for a good deal of people.
I avoid Southwest for the stressful unassigned seating (with seating abusers galore — people paying for one passenger in their large group to get A list or early bird and then holding seats for the whole clan and the FAs allowing it so the “family could sit together” and ALL the wheelchair fakers) PLUS higher prices for what you get… I have a flight in February on them due to unavoidable routing and schedules and...
I avoid Southwest for the stressful unassigned seating (with seating abusers galore — people paying for one passenger in their large group to get A list or early bird and then holding seats for the whole clan and the FAs allowing it so the “family could sit together” and ALL the wheelchair fakers) PLUS higher prices for what you get… I have a flight in February on them due to unavoidable routing and schedules and I HOPE assigned seating is offered by then. I would gladly pay for it. I don’t think the loading will be delayed any more than any other airline. I will definitely fly southwest more with these changes, especially if they simplify their weird pricing.
I am guessing they will take the extra space with the thinner seats and lower pitch in the rear and increase it in the front. But won't change the appearance of the seats?
Wonder if they will keep people from moving from the back to front when empty seats?
To increase revenue they can have the FAs charge self upgraders a fee.
As FNT Delta Diamond suggests, now that SW has acknowledged its seating practices need to conform to industry norms, a follow-up needs to be installation of actual domestic first class seats. Not just extra leg room. Otherwise, the price of Business Select is unjustified.
I will say that (for this not very large passenger), I often find European business (3-3 seating with middle seat blocked in 737/320) a sometimes nicer experience than US 2-2 F seating.
Glad to see these changes. Open seating really only benefits solo travelers with A boarding who can make a mad dash for the left exit aisle to get “The Best Seat.” If that’s taken, window or aisle near the front or plane was generally a solid option. This was me for about a decade and therefore I never really had any issues with Southwest.
Traveling as a couple completely shifted my view and now...
Glad to see these changes. Open seating really only benefits solo travelers with A boarding who can make a mad dash for the left exit aisle to get “The Best Seat.” If that’s taken, window or aisle near the front or plane was generally a solid option. This was me for about a decade and therefore I never really had any issues with Southwest.
Traveling as a couple completely shifted my view and now I hate open seating. Traveling as a group of three or more is a nightmare…. which is kinda odd since typically people view Southwest as more family friendly.
Good for Southwest for making this change.
I'm looking forward to the OMAAT review of Southwest's premium extra legroom seating.
And a photo of a 737 MAX engine in SW colours
SWA removing the #1 most disliked practice will bring new customers and make existing customers happier.
The big three will act nonplussed and even arrogant about this change. This move is the biggest threat in siphoning off flyers than any new entrant (Breeze,Avelo).
"the #1 most disliked practice"
lol, it really isn't
The end of Jetway Jesus is near!
It really should be a crime to make fraudulent requests for disability accommodation. (the liars should also face lifetime bans.)
Actual consequences would get rid of Jetbridge Jesus for once and for all.
No need for a felony though - a misdemeanor would suffice for this.
Assigned seating will punch a huge hole in social media.
Same old snack mix, same old ass planes, same tacky ass uniforms.
I've never flown Southwest and will never, ever fly them until (1) I can have an assigned seat and (2) I can buy something equivalent to domestic first-class. As soon as I hit 2 million miles with Delta (late 2025), I'll be a free agent and will book the best, cheapest premium product, regardless of carrier.
Such a strange flex.
Just wait until there is a Crowdstrike outage, and you have to fly WN because they are the only airline flying to where you need to go. Oh wait...
SNAP! Nice
Our long national nightmare is over.
Nailed it!