Southwest Airlines on Thursday announced changes to its longtime business model in the hopes of reversing turbulence from declining profits and a sinking stock price. The Dallas-based carrier is pivoting from the so-called open seating model, charging a premium for the best seats, and offering red-eye flights, the airline said in a press release.
Southwest said that 80% of its customers surveyed want their seat assigned before arriving at the airport rather than picking a seat when they board. The airline expects to operate flights under this new model in the first half of 2026. For travelers with a preference for extra legroom, Southwest said it will allow customers to purchase premium seating options while maintaining standard economy seating.
Southwest said it expects to begin offering red-eye flights in "key markets" beginning in February 2025. The company did not specify which markets in the press release. The changes come as the airline is facing pressure to boost profits from activist investor Elliott Management. The carrier's chief operating officer, Andrew Watterson, notified workers in a Sept. 19 video that changes were coming to the company, Bloomberg reported, citing a transcript.