Southwest to get rid of open seating, offer extra legroom in biggest shift in its history | CNBC
Southwest Airlines, a beloved name in budget travel for over five decades, is shaking things up with some major changes. They’re ditching their open seating policy—where you pick your seat after boarding—and are rolling out assigned seats and extra legroom options starting next year. This shift comes after years of deliberation and pressure to boost revenue and appeal to a broader range of travelers.
Starting in February, Southwest will also introduce overnight flights, catering to those who prefer to fly when it’s dark. The airline’s research showed that open seating was a significant factor driving customers to choose competitors, with 80% of Southwest’s passengers expressing a preference for assigned seating. This shift aims to align Southwest more closely with changing customer preferences, particularly those of corporate travelers who are flying longer distances and favor assigned seats.
CEO Bob Jordan emphasized that these changes, though significant, are in response to evolving travel habits and market demands. Customers today are taking fewer short trips and spending more on longer journeys, where comfort and assigned seating become more important. Despite these adjustments, Southwest is keeping its popular “bags fly free” policy, which remains a major draw for many travelers.
The changes come amid pressure from activist investors, including Elliott Investment Management, which recently bought a substantial stake in Southwest and is pushing for new leadership. Despite a 46% drop in second-quarter profits and calls for changes, Jordan insists these updates are a result of thoughtful research and not directly related to investor demands……….
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How do shifts in consumer preferences and competitive pressures influence a company’s business strategy, especially when it comes to balancing cost and customer satisfaction?
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