Southwest Airlines is planning to introduce assigned seating and premium upgrades next year, as part of a "cabin monetization project" to improve its financial performance and offer more options for customers.
Southwest Airlines will scrap its unique "open seating" system next year to make way for assigned seating tickets and new premium upgrades as part of a "cabin monetization project" the budget airline hopes will help steady a turbulent financial streak.
The company is expected to reveal more details about the plan, including price changes and the anticipated early 2025 rollout, during an investors meeting on Sept. 26.
The company's new executive vice president for commercial transformation, Ryan Green, will lead the project, according to an overview Southwest released Thursday.
In a memo on strategic initiatives, the company acknowledged that it will be a complex endeavor after five decades operating with its current cattle call boarding process and free-for-all seating selection.
"Our implementation of assigned and premium seating is part of an ongoing and comprehensive upgrade to the Customer Experience, one that research shows Customers overwhelmingly prefer," Southwest CEO Bob Jordan said in a statement.
"With record numbers of Passengers choosing Southwest Airlines today and work underway to address the challenges we face, we are excited about what the future holds."
Southwest said it researched the switch and found 80 percent of existing Southwest customers and 86 percent of potential customers prefer assigned seats, like most other airlines provide.
The move comes amid other operational changes the company plans as it tries to shore up its finances.
Air travel has reached new heights since its COVID-19 pandemic slump, but that hasn't translated to companies' bottom lines. Southwest in particular has faced increased scrutiny — and hefty fines — over safety concerns and mass delay issues.
"We are taking urgent and deliberate steps to mitigate near-term revenue challenges and implement longer-term transformational initiatives that are designed to drive meaningful top and bottom-line growth," Jordan said.
New premium cabin offerings will include the option to pay more for additional legroom.
Southwest also will launch 24-hour operation capabilities with the introduction of overnight, or "red-eye," flights on Feb. 14, 2025, in select locations, including Baltimore. Additional red-eye offerings will be rolled out over the year.
"Redeye flying, coupled with continued reductions in turn-time through new technologies and procedures, is expected to provide incremental revenue and cost savings, enabling Southwest to fund nearly all new capacity over the next three years without incremental aircraft capital deployment," the company said.
