Southwest Airlines May Ditch 'Open Seating' To Make More Money From 'Premium Seating' Options

Southwest Airlines Co LUV may reconsider its traditional open seating policy, opting for assigned seats and premium options to attract younger travelers.

The potential change, marking a departure from its historic model, is under serious consideration. CEO Bob Jordan hinted at the airline’s evolving approach, emphasizing the importance of understanding and meeting customer expectations, reported Bloomberg.

This significant shift could be the most substantial adjustment since the airline’s inception in 1971.

The airline’s executives have been evaluating evolving passenger preferences, acknowledging the industry’s shift towards premium offerings, the report read.

However, they’ve maintained a cautious approach, awaiting confirmation of sustained trends. An official decision on seating arrangements, along with other strategic initiatives like red-eye flights, is anticipated at an investor day event in September, the report added.

In its earnings report yesterday, the company revealed its decision to close its operations at Bellingham International Airport, Cozumel International Airport, Houston’s George Bush Intercontinental Airport, and Syracuse Hancock International Airport. 

Related: Southwest Airlines’ Record Passenger Numbers Overshadowed By Q1 Earnings Slump And Boeing Setbacks

Chief Commercial Officer Ryan Green highlighted Southwest’s historical aversion to altering its no-frills approach but acknowledged incremental changes over time.

Despite its initial resistance, the airline has embraced technology enhancements and expanded sales channels beyond its website.

With current flights often operating at full capacity, Southwest recognizes the need to address evolving customer expectations.

The potential shift in seating policy is under scrutiny, with careful consideration of its operational impact and alignment with customer preferences.

“There’s no decision,” Jordan affirmed, emphasizing the importance of data-driven insights to determine the best course of action.

Southwest Airlines stock lost over 11% in the last 12 months. Investors can gain exposure to the stock via U.S. Global Jets ETF JETS and IShares U.S. Transportation ETF IYT.

Read Next: Airline Passenger Rights Elevated: Biden Administration Enforces Refund Rule

Price Action: LUV shares closed lower by 6.96% at $27.26 on Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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