Southwest Airlines is making significant changes to its business model after facing pressure to increase revenue. The airline will be ending its open seating policy and introducing extra legroom seats on its airplanes. Customers will soon be able to purchase flights with extra legroom and the airline will begin offering overnight flights starting in February.
Southwest executives have been studying these changes for years and have found that the open seating model was the number one reason passengers were choosing competitors over Southwest. Research showed that 80% of Southwest customers prefer assigned seating.
The airline’s decision to make these changes comes after activist investor Elliott Investment Management disclosed a nearly $2 billion stake in the company and called for new leadership to address underperformance compared to competitors. Southwest is now under pressure to segment its product offerings like other airlines.
Despite these changes, Southwest will not be altering its policy of allowing two free checked bags per passenger. The airline expects about a third of seats on its Boeing 737s to offer extended legroom, pending approval from the Federal Aviation Administration.
Southwest will provide more details about the upcoming changes at an investor day at the end of September. CEO Bob Jordan emphasized the importance of adapting to meet customer needs and expectations in the evolving airline industry.
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