Southwest Airlines Co. announced several initiatives to elevate the customer experience and improve financial performance. As part of its strategic transformation, the airline is moving forward with plans to allocate seats, offer premium seating options, redesign the boarding model and introduce late-night flights.
During its April quarterly financial results, the airline shared that it was studying preferences and expectations for products, including onboard seating. In addition to meeting customer demand, the new amenities are expected to generate additional revenue and strengthen financial performance.
Southwest will provide further details on its comprehensive plan to implement transformative business initiatives, improve operational efficiency and capital allocation discipline during its Investor Day in late September.
Assigned and premium seating
After listening to customers and conducting research, Southwest decided to assign seats and offer premium seating options on all flights.
The airline is confident that these customer enhancements will meet expectations and will not compromise the airline’s operational efficiency.
Research indicates that 80% of Southwest customers and 86% of potential customers prefer assigned seating. When a customer decides to stop flying Southwest and choose a competitor, seat availability is cited as the top reason for switching. By switching to an assigned seating model, Southwest hopes to broaden its appeal and attract more flights from its current and future customers.
In addition to assigned seating, Southwest will offer a portion of the cabin in premium, extra-legroom, which research shows is preferred by many customers. While specific details of the cabin layout are still being designed, Southwest expects about one-third of the fleet’s seats to offer extra legroom, in line with what its industry peers offer on narrow-body aircraft.
Incorporation of night flights
The airline also announced it is adding 24-hour operating capabilities with the introduction of overnight flights. Bookings on the initial routes are available through Southwest.com, and the first overnight flights will land on Valentine’s Day 2025 in five initial nonstop markets: Las Vegas to Baltimore and Orlando; Los Angeles to Baltimore and Nashville; and Phoenix to Baltimore.
Southwest plans to gradually incorporate additional overnight flights into the airline’s upcoming schedules as part of its multi-year transformation to a 24-hour operation. The overnight flights, coupled with continued reductions in turnaround time through new technologies and procedures, are expected to provide incremental revenue and cost savings, allowing Southwest to fund nearly all of the new capacity over the next three years without incremental capital deployment in aircraft.
Changes in the organizational chart
Given the significance of the changes, Ryan Green, previously executive vice president and chief commercial officer, will assume the new role of executive vice president of commercial transformation, leading the development and implementation of these and other commercial initiatives already underway. In this new role, he will report to President, CEO and Vice Chairman of the Board Bob Jordan.
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