A Southwest Airlines Boeing 737-700 plane lands at the National Airport. Ronald Reagan in Washington in Arlington, Virginia, on May 7, 2023.
Nicolas Economou | Nurphoto | Getty Images
Southwest Airlines is considering changes to its single-class, open-seat cabins to boost revenue, CEO Bob Jordan told CNBC on Thursday, in what would be one of the biggest changes in the airline’s history.
“We’re looking at fresh initiatives like how we seat and board our planes,” Jordan said in an interview after the carrier’s disappointing first-quarter report.
Everything in the southwest-Boeing The 737 fleet has one economy cabin and no assigned seats, although it does offer early boarding for a fee so customers can get their preferred seats. Over the years, the airline has focused on keeping its product straightforward and user-friendly, striving to keep its costs and complexity to a minimum.
Meanwhile, rivals including Delta AND United they touted robust revenue growth from premium seats such as business class and high upsell rates.
Analysts have repeatedly asked Southwest about its options for premium seats or additional fees. (The airline does not charge travelers for the first two pieces of checked baggage.)
Most U.S. airlines charge travelers to select multiple seats in advance, even if they don’t have extra legroom. Eight U.S. carriers — Alaska, Steadfast, AmericanDelta, Border, JetBlue, Ghost and United – collectively earned $4.2 billion in 2022 from seat fees on their domestic networks, according to Jay Sorensen, an airline ancillary revenue expert at IdeaWorksCompany.
Jordan said no decisions have been made yet on what changes Southwest will ultimately make, but said the study produced “fascinating” results.
“Customer preferences change over time,” Jordan said.
Although details were not provided on Southwest’s earnings call, when asked whether Southwest would consider a separate cabin on its planes, Ryan Green, the carrier’s chief commercial officer, said: “Curtains and things like that are a little different from what Southwest Airlines is.”
Green added that the carrier is not considering charging fees for checked bags because “people choose Southwest Airlines because we don’t have bag fees.”
— CNBC Phil LeBeau contributed to this report.
