Why Southwest just broke its 50-year boarding tradition | CNN Business (2024)

Why Southwest just broke its 50-year boarding tradition | CNN Business (1)

Southwest was an airline pioneer.

New York CNN

Southwest Airlines pioneered the low-fare, no-frills airline model. But Southwest is now ending open-seat boarding, a distinct part of its successful five-decade-long model and its brand identity.

Southwest said Thursday that it will abandon its free-for-all seating arrangement and move to assigned seats. The company said 80% of customers prefer an assigned seat, and the change will also help the company charge some passengers more for new premium seats. The move shows how a company that once stood out by being different from competitors— “conventional wisdom put a hell of a lot of airlines out of business” its founder Herb Kelleher said — has become like other airlines.

The open-seat boarding process has been central to what Southwest calls its “egalitarian operating philosophy,” along with no bag fees or first-class cabins. Launched in 1971 with flights connecting Dallas, Houston and San Antonio, Southwest transformed the airline industry by offering cheap fares and helped open up air travel beyond the wealthiest Americans.

“Southwest open seating is the ultimate expression of its founding ethos: to make air travel affordable and accessible for everyone,” the company says on its website. An unofficial motto of Southwest Airlines’ open seating was once, “You can sit anywhere you want — just like at church.”

If you’ve never flown Southwest, here’s how the boarding process works: passengers are assigned one of three boarding groups and positions — 1 through 60 —when they check-in. Once their boarding group is called at the gate, they line up by number and board the plane. They are free to choose any seat available.

Why Southwest just broke its 50-year boarding tradition | CNN Business (2)

Southwest in 2004. It has become known as the "love airline."

The company’s open-boarding policy made business sense for Southwest, allowing it to fly more planes a day than competitors. Open seating helped Southwest load and unload passengers, which Southwest CEO Bob Jordan said meant more on-time departures and cost savings on Thursday’s earnings call. Southwest’s method worked because passengers spent less time waiting in the aisle and had more freedom to sit where it’s least crowded.

Even as other airlines switched to assigned seats in recent decades, Southwest kept its boarding process the same.

“Open seating became a very strong brand component with our customers, and something that we wanted to continue to offer them — that freedom of choice,” former Southwest CEO Gary Kelly said in 2007.

The radical shift away from five decades of precedent represents changing customer preferences – and struggles in Southwest’s traditional business model. The company has been losing money in recent years, and it has been hamstrung by its inability to charge for extra legroom and other seating perks like its competitors can.

‘Sad day’

Some loyal Southwest customers vented their frustration about the policy change on social media.

“Being B42 on Southwest Airlines and asking everyone in the area ‘what number are you?’ to make sure B43 isn’t skipping you was an American tradition,” one fan said on X. “Sad day.”

“I actually prefer open seating in certain cases; I’m able to avoid kids, seats where someone made a mess, people who look sick, people who are eating something gross,” another wrote on social media app Bluesky.

Travelers wait in line on the check-in floor of the Delta Air Lines terminal at Los Angeles International Airport on Wednesday. Mario Tama/Getty Images Related article Delta is finally emerging from chaos. Did it not learn anything from Southwest’s meltdown?

Sandy Wolfe, a frequent Southwest flier, told CNN that open boarding was part of Southwest’s appeal and separated it from other airlines. She worries she will have to pay extra for her traditional A-group seats as Southwest moves to assigned seats.

“I have really liked their uniqueness. They weren’t like the other airlines,” she said. “I thought it was an adventure standing in line. I always met great people.”

But Wolfe said she understood that open-seat boarding made some customers anxious and has friends who refused to fly Southwest because they can’t get assigned seats.

Other Southwest customers on social media said they were happy with the move.

“Open seating on Southwest is a nightmare if you can’t get to the gate before boarding begins,” one customer said on X, noting that traffic and long lines in security often made it hard to arrive with enough time.

Business in turmoil

The move may help Southwest’s profit at a tumultuous moment for the company.

Southwest is under pressure from activist investors at Elliot Investment Management, who have been pushing for changes in management and growth in profitability. Southwest reported a 51% drop in adjusted profit last quarter, despite hitting record revenue.But activist pressure did not factor into the company’s move to assigned seats, Southwest CEO Jordan said on the earnings call.

Southwest has been facing competition from major carriers, American, United and Delta, which get much of their revenue from charging more for premium seating. It also faces pressure from ultra-low cost carriers, such as Spirit and Frontier, which offer bargain-priced seats. Customers have to pay extra for just about everything on these flights, including carry-on bags.

Although Jordan told investors Southwest has no plans to start charging for the first two checked bags, activist investors could press Southwest to charge for bag fees to increase profits, said William McGee, a Senior Fellow for aviation and travel at the American Economic Liberties Project, which advocates against concentrated economic power.

“Southwest is the only airline in the United States that does not charge junk fees for first checked bags, or even second checked bags,” he said. “And Southwest has long avoided charging ticket change fees. Elliott’s influence is already being felt, and it seems apparent more junk fees are part of the master plan.”

Why Southwest just broke its 50-year boarding tradition | CNN Business (2024)

FAQs

Why Southwest just broke its 50-year boarding tradition | CNN Business? ›

The company's open-boarding policy made business sense for Southwest, allowing it to fly more planes a day than competitors. Open seating helped Southwest load and unload passengers, which Southwest CEO Bob Jordan said meant more on-time departures and cost savings on Thursday's earnings call.

What have been the major reasons for the overwhelming success of Southwest Airlines? ›

Southwest treats its employees well

In addition to its commercial and financial success, Southwest Airlines is known for its excellent customer service. Southwest has built an impeccable reputation by putting customers first and ensuring its employees are content and financially secure.

What is Southwest's business model? ›

Southwest Airlines' business model is based on extremely efficient operations, low-cost pricing, and innovative logistics solutions. Furthermore, their strategy also includes a deep focus on customer experience and looking ahead. Finally, none of this would be possible without a motivated team of employees.

Why is Southwest boarding different? ›

Southwest follows an open seating style, meaning there are no assigned seats. You'll be assigned a boarding group (either A, B, or C) and position (1-60+) upon check-in, which determines your boarding order. Once on board, you choose your seat. If you're last to board, you likely won't get to sit with your family.

How can Southwest Airlines remain competitive in the future? ›

Low Base Airfare. One of the primary ways Southwest maintains its competitive advantage is through its low-cost business model. The company has been able to keep costs down in various ways such as its use of a single type of plane and its focus on short-haul flights.

Why is Southwest struggling so much? ›

Despite booming travel, airlines are struggling to turn a profit. Southwest expects seat-mile revenue will decline up to 4.5%, while American predicts up to 6%. Experts blame fewer last-minute business travelers, overcapacity, Boeing delays, and inflated costs.

What was the problem with Southwest Airlines? ›

As many as 16,900 flights were canceled in what some were calling the biggest meltdown in modern airline history. The cancellations were initially blamed on adverse weather but were later attributed, in part, to issues with the company's computer technology.

What are Southwest's weaknesses? ›

Southwest's Weaknesses (Internal Factors)

Limited presence in the international commercial aviation market. Thin profit margins linked to cost leadership.

Who is Southwest's biggest competitor? ›

Top Southwest Airlines Competitors & Similar Companies
  • United Airlines.
  • American Airlines.
  • JetBlue Airways.
  • Delta Airlines.
  • Virgin Atlantic.

What is Southwest's current strategy? ›

What is SouthWest Airlines Strategy? Southwest Airlines primarily employs a low-cost strategy in the airline industry. This strategy involves offering relatively low fares compared to competitors while maintaining operational efficiency and keeping costs under control.

Who has priority boarding on Southwest? ›

These restrictions include, but are not limited to, your reservation must be booked 36 hours prior to scheduled departure, and on group travel itineraries, priority boarding will only apply to A-List and A-List Preferred Members.

What is the best boarding group for Southwest? ›

How Southwest boards its planes
  • A boarding group: This is where you want to be if you want the chance to be near the front of the plane or a guaranteed aisle or window seat. ...
  • B boarding group: This is the next best boarding group to be in if you want the chance to select a seat you can live with.
Dec 11, 2023

Is Southwest upgraded boarding worth it? ›

Yes, undoubtedly upgrading boarding is better than an early bird on Southwest because passengers who have purchased upgraded boarding will guarantee you to get A1 - A15 and priority boarding while Early boarding does not guarantee you to get an A1 - A15.

What is the future outlook for Southwest Airlines? ›

LUV Stock Forecast FAQ

Based on analyst ratings, Southwest Airlines's 12-month average price target is $27.08. Southwest Airlines has 0.15% upside potential, based on the analysts' average price target. Southwest Airlines has a consensus rating of Hold which is based on 3 buy ratings, 9 hold ratings and 2 sell ratings.

What is Southwest Airlines secret to success? ›

The Low-Price Leader: A Winning Formula 💰 Southwest has always focused on offering the lowest possible fares to attract the highest possible volume of customers. This strategy has not only made air travel more accessible but has also forced competitors to lower their prices.

Who bought Southwest Airlines? ›

Activist shareholder Elliott Investment Management has bought a $1.9 billion stake in Southwest Airlines and is seeking to force out the CEO of the airline, which has struggled with operational and financial problems.

What is so good about Southwest Airlines? ›

No hidden fees or nickel-and-diming

Not having to worry about added fees is a reason why flying Southwest can make a lot of sense. And look at the fare classes. The Big Three airlines might seduce you with ultra-low ticket prices, but there's a good chance those fares are for basic economy.

What caused the chaos at Southwest Airlines? ›

But the particularly severe disruption at Southwest Airlines is due in large part to the company's approach to flight scheduling, which departs from the typical hub-and-spoke model that most airlines rely on, Henry Harteveldt, a travel industry analyst at Atmosphere Research Group, told ABC News via email.

Why is Southwest Airlines one of the best companies to work for? ›

Southwest Airlines Co.

Based in Dallas and famous for an Employee-first corporate Culture, Southwest maintains an unprecedented record of no involuntary furloughs or layoffs in its history.

What caused Southwest meltdown? ›

Southwest's meltdown

But while other airlines managed to recover their schedules, Southwest's antiquated technology and manual scheduling processes could not keep up with the rate of changes as cancellations and delays rolled through the nation's flight system.

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