Southwest Airlines plans to begin assigning seats, breaking with a 50-year tradition
DALLAS — Goodbye, cattle call.
Southwest Airlines announced Thursday that it plans to abandon the open boarding system it has been using for over 50 years and will begin assigning seats to passengers, like all other major airlines.
The airline said it had been study seating optionsby conducting tests and surveying customers. Southwest found that preferences have changed over the years and the vast majority of travelers now want to know where they are sitting before arriving at the airport.
Southwest Airlines’ unusual boarding process began as a quick way to load passengers and limit the amount of time planes and crews spend sitting idly on the ground, not make moneyThis allowed the airline to operate more efficiently and even fit a few extra flights into its daily schedule.
It’s one reason why Southwest is the only U.S. airline that has remained profitable every year until the coronavirus pandemic.
Here’s how it works: Instead of being assigned a seat when they buy their ticket, Southwest Airlines customers check in exactly 24 hours before departure to reserve their spot in the boarding queue. Initially, the first 30 to check in were placed in the coveted “A” boarding group, which guaranteed them a window or aisle seat. Latecomers landed in “B,” which was always acceptable, or “C,” which often meant a middle seat.
The system has become less democratic over time, with Southwest letting passengers pay extra to secure a seat at the front of the line. Even so, many loyal Southwest customers still appreciate the open seats. The airline believes it will adapt.
“I know there will be customers who say, ‘I want to continue to have open seats.’ They’re a minority,” Southwest Airlines CEO Robert Jordan told CNBC, “but we had the same problem when we got rid of plastic boarding passes. We had the same problem when we got rid of peanuts in the cabin. I’m confident we can convince them.”
According to the airline, surveys show that 80% of its customers — and 86% of “potential” customers — want assigned seats. Jordan said having open seats is the top reason travelers give for choosing another airline over Southwest.
In addition to the seat changes, Southwest also plans to sell premium seats with more legroom — a standard practice among other major U.S. carriers — and offer night flights for the first time.
Southwest said night flights will begin flying in mid-February on nonstop routes including Las Vegas to Baltimore and Orlando, Los Angeles to Baltimore and Nashville and Phoenix to Baltimore, with more routes added over time.
The changes come as the Southwest is under pressure from Elliott Investment ManagementThe hedge fund argues that the airline is lagging behind its competitors financial performance and has failed to adapt to the times. He wants to replace Jordan and President Gary Kelly.
The Southwest also faces increased surveillance Federal Aviation Administration after a series of worrisome flights, including one that plunged less than 400 feet into the ocean off Hawaii, two that flew at extremely low altitudes while still miles from landing at airports in Oklahoma and Florida, and another that was discovered with rudder damage after an unusual “Dutch roll” motion during flight.
Southwest announced the seat changes and other changes on the same day it and American Airlines reported sharp drops in second-quarter profits despite higher revenue.
The airlines are grappling with higher costs and reduced pricing power, particularly on flights within the United States, as the industry adds flights faster than travel demand grows.
Dallas-based Southwest said its second-quarter profit fell 46% from a year earlier to $367 million, as higher labor, fuel and other expenses outpaced revenue growth. The results were in line with Wall Street expectations.
American Airlines The company also reported a 46 percent drop in profit to $717 million and said it would break even in the third quarter, well below Wall Street expectations of 48 cents a share for the July-September period.
“American Airlines has not met our initial expectations” because of a since-abandoned sales strategy and an oversupply of domestic flights, CEO Robert Isom said. He added that the airline is responding with a strategy that increases profits and “makes it easy for customers to do business with American Airlines.”
American cut its full-year profit forecast to between 70 cents and $1.30 a share, from a previous forecast of $2.25 to $3.25 a share.
Shares of major U.S. airlines rose Thursday after the session began. Southwest Airlines Co. gained 3% and Fort Worth, Texas-based American Airlines Group Inc. rose 5% in late morning trading. Delta, United, Alaska and JetBlue also gained.
