Southwest sets date for change everyone hates

Since taking its first flight in 1971, low-cost airline Southwest Airlines (LUV) stood out from other carriers by not assigning seats but instead letting travelers board in groups and then choose from any empty place available.

This policy was so iconic that a Delta Air Lines (DAL) flight attendant once went TikTok viral for yelling “this isn't Southwest!” when passengers kept moving around the cabin to switch seats.

But despite its popularity, the open seating policy was one of many cuts made to bring down costs put in place after hedge fund Elliott Investment Management took over as majority investor in 2024. The airline also axed executives like Gary Kelly and Ryan Green, cut 15% of its workforce and got rid of its even more popular two-bags-fly-free feature.

Don't miss the move: Subscribe to TheStreet's free daily newsletter

Southwest is framing it as ‘more choice' but is it really?

While Southwest has been telling passengers to prepare for assigned seating for more than a year, the airline has now set a date for when the switch will officially be made —for any ticket purchased after July 27 for flights taking place after Jan. 27, 2026., travelers will need to either pay for assigned seating or have one randomly assigned to them during check-in.

Southwest Executive Vice President Customer & Brand Tony Roach framed it as “more choice and greater control over [the] travel experience” but, in matching what is offered by almost every airline to bring in additional revenue, the change gets rid of the perk that made many loyal to Southwest for years.

At a March earnings call, Southwest told investors that the change would bring $800 million more in interest and taxes by the end of 2025 and an additional $1.7 billion in 2026. At the time that Elliott stepped in, Southwest had been reporting an unbroken string of quarterly losses including one of $149 million in the first quarter of 2025.

“Assigned seating unlocks new opportunities for our Customers — including the ability to select Extra Legroom seats — and removes the uncertainty of not knowing where they will sit in the cabin,” Roach said in a further statement. “This is an important step in our evolution, and we're excited to pair these enhancements with our legendary Customer Service.”

Southwest Airlines has had an open seating policy since 1971.

Image source: Shutterstock

‘A boarding construct that sort of paired well with assigned seating'

In a wider overhaul of its pricing model, Southwest recently also reworked its pricing bundles to offer increasingly more perks at a price — those who choose the highest Business Select bundle or travelers with loyalty status will still get the free bags and seat assignment included. In this, the airline is also matching what is currently done by most major airlines by offering seats and baggage as either perks or paid additions rather than luring in travelers who might have otherwise gone to another airline by offering them for free.

More on travel:

“We wanted to make sure that, as we designed a boarding construct that sort of paired well with assigned seating, that we were optimizing for efficiency, but also the second priority: balancing that with making sure that we're taking care of our most loyal customers, so tier members, cardholders and customers who buy our most premium products,” Stephanie Shafer Modi, managing director of fares and ancillary products at Southwest, said to CNBC.