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Service dogs flying on Southwest.
These good bois (or girls) should still get to sit wherever they want (Getty Images)

Southwest ditches its love-it-or-hate-it open seating policy

After decades of open boarding, the company is planning “transformational” changes to make its boarding and seating just like everybody else’s.

Southwest Airlines, which built a reputation over decades for being different than all the other airlines, has decided it should probably just be like all the other airlines. 

The company said Thursday that it would do away with its love-it-or-hate-it open seating policy and instead change its boarding process, assign seats, and offer premium seating options. About a third of Southwest’s seats will now offer extended legroom, “in line with that offered by industry peers,” the company said.

There’s lots of talk in the press release about meeting customers’ needs and “fostering more loyalty” among flyers, but a company executive also said the quiet part out loud: “These changes are expected to generate additional revenue as we capitalize on greater demand.”  

Just in case any Southwest aficionados want to complain about the changes, the airline has a whole bevy of stats ready to explain to you how great of an idea this is: Southwest said it did “thoughtful and extensive research” on the changes and that 80% of Southwest customers and 86% of potential customers prefer to have an assigned seat. 

It also says it ran live boarding trials and “over 8 million simulation-based boarding trials” before committing to the change. (No word on whether the simulated boarding trials included a person who spends 10 minutes trying to jam their absolutely stuffed carry-on into the overhead bin when it’s painfully obvious to anybody with eyeballs that it isn’t gonna fit, then has to clog the aisle all the way back to the front of the plane to check it.)

The moves come as Southwest contends with activist investor Elliott Investment Management, which has built up a $1.9 billion stake in the company and is agitating for operational changes. 

Southwest stock was down about 5% in premarket trading, though it’s unclear whether that’s a reaction to the changes or the 46% drop in quarterly profit Southwest also reported.

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Premium seats help push airlines higher following third-quarter results

Shares of American Airlines are climbing toward the carrier’s best trading day since August 12, when ultra-budget rival Spirit issued its initial warning about its ability to survive. American’s shares are up more than 7% on Friday afternoon.

Investors’ optimism comes a day after American posted a better-than-expected full-year earnings forecast. In a call with investors, American said that it’s ramping up its premium cabin offerings.

“Our ability to grow capacity in premium markets will be further supported as we take delivery of new aircraft and reconfigure our existing fleet. These efforts will allow us to grow our premium seats at nearly two times the rate of main cabin seats,” CEO Robert Isom said. American CFO Devin May said that nose-to-tail retrofits of certain wide-body jets will bump the number of premium seats available on those planes by 25%.

Extra legroom has been a boon for major carriers, particularly this quarter. Delta Air Lines said its premium product revenue grew 9% in Q3, compared to a 4% drop in economy seat revenue. Similarly, United Airlines said its premium revenue grew 6%, outpacing economy. Shares of both airlines were up more than 3% on Friday.

Carriers with less exposure to first- and business-class tickets like Southwest Airlines and JetBlue didn’t see the same amount of momentum on the day.

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