The airline leadership announced their new direction during their investor day in Dallas on Thursday, Sept. 26, 2024.
New Direction Aimed at Enticing Younger Customers with More Income
Speaking to investors, airline chief executive Bob Jordan outlined the direction Southwest wants to go in order to improve their profitability. The most visible of them will be the new boarding procedure, which will roll out next year.
Under the new plan, travelers will start purchasing assigned seating by the second half of 2025 for flights starting in the first half of 2026. In addition to the seating options, flyers can also book premium seats at the front of the aircraft. The premium economy seats will offer up to five inches of additional pitch for one-third of the cabin.
In addition to a new seating order and premium economy, Southwest is looking to expand their reach beyond the Americas. By 2025, the Dallas-based carrier expects to launch a partnership with Icelandair for flights through Baltimore-Washington International Airport (BWI). The company also expects to “add at least one more additional partner” before the end of 2025.
Although the rates for earning and using Rapid Rewards points won’t change, Southwest says they will update their loyalty tier benefits. Leaders promised additional benefits are coming to A-Tier and A-Tier Preferred elites without offering specifics. Credit card holders will also get benefits for assigned seating and premier seating in the future.
The one thing that isn’t changing at Southwest is the checked bag policy. Flyers will still be able to book two checked bags for free to their final destination, stating “any change in the current policy that provides every Customer two free checked bags would drive down demand and far outweigh any revenue gains created by imposing and collecting bag fees.”
Projections by the airline say the changes will drive $4 billion in cumulative incremental earnings before interest and taxes by 2027.
Southwest’s planned transformation comes after the airline granted concessions to Elliott Investment Management after taking a major stake in the carrier. In addition to the changes outline above, former chief executive and current board chair Gary Kelly announced his retirement after the 2025 annual meeting.
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Source: frugal travel guy