Southwest reveals when and how it will get rid of open seating

By Chris Isidore, CNN

New York (CNN) — Southwest Airlines’ substantial changes to its business and boarding process are coming – but not for a while.

Open seating isn’t going away for more than a year. The airline said on Thursday that its passengers will be able to book a reserved seat in late 2025 and those seats will start to become available on flights in early 2026.

Southwest announced in July it would move away from the open seating model it has been known for throughout its 53-year history. It also announced it would offer premium seating for the first time. It currently has the same class of seats throughout its cabins.

Part of the reason Southwest isn’t rolling out its assigned seating model sooner is that premium seating will take some time to reconfigure in the planes. But reserved seating is available on virtually every other airline and could have started much sooner. Southwest pushed back the expected start date in an announcement made as part of its “investors’ day” presentation Thursday. It did not give details for when the premium seating with more legroom between seats would be available.

In July, Southwest CEO Robert Jordan told investors that the company’s plan was to sell assigned seating beginning in 2025. Technically, it will do that by allowing passengers to book those seats late next year. But not having the assigned seats available until 2026 might disappoint passengers who want an assigned seat. According to Southwest 80% of its customers and 86% of passengers who choose other airlines want assigned seats.

Southwest has found itself under pressure from an activist shareholder group, Elliott Investment Management, which wants to replace its top management and make other changes to improve its profitability. The airline insists the plans for assigned seating had been in the works even before the pressure from Elliott.

It also announced it would start partnerships with foreign airlines to offer its passengers the chance to book overseas flights. Southwest has far fewer international flights than its three largest rivals, American, United and Delta airlines. Its first partnership will be with Icelandair next year, connecting with it at its Baltimore-Washington International Airport hub.

No fee for first two checked bags to stay

The airline confirmed an earlier statement that it will continue to allow passengers to check up to two bags for no fee. The US airline industry collected $3.7 billion in baggage fees in just the first half of this year, according to the Bureau of Transportation Statistics, with just 1% of that coming from Southwest passengers who check more than two bags. But Southwest insisted that not charging for the first two bags helps its bottom line.

“Bags fly free’ is cited as the number one issue in terms of why customers choose Southwest,” Jordan said in July.

“The company believes any change in the current policy… would drive down demand and far outweigh any revenue gains created by imposing and collecting bag fees,” it said Thursday.

Jordan also told investors in July that charging for bags would delay the time it takes to load the planes as passengers seek a place to store carry-on bags they are now checking. The airline said Thursday part of its plan to improve profitability is to further improve its turn-around time when planes are on the ground.

One thing Southwest did announce for investors Thursday was a plan to spend $2.5 billion on a repurchase of its shares. Shares of Southwest (LUV), which are essentially unchanged for the year through Wednesdays close, rose more than 6% in premarket trading on the news.

This story has been updated with additional reporting and context.

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