Southwest Airlines sets a date, plan for the end of open seating

Southwest Airlines passengers will fly in assigned seats for the first time on Jan. 27, the carrier told CNBC. Customers can start buying tickets with assigned seats on July 29.

The move ends more than half a century of open seating on the airline, a policy that has set it apart from rivals for decades — along with two free checked bags. Both things are changing as Southwest’s leaders seek new revenue streams to keep up with more profitable rivals.

Southwest said in March that its host of initiatives would add $800 million to earnings before interest and taxes this year and $1.7 billion in 2026.

The airline first announced it would end its open seating a year ago, but it had yet to set a date.

The changes are part of Southwest’s massive overhaul of its business model. The carrier in March also said it would start charging many customers to check bags and announced new fare types this spring. Top-tier customers are exempt from many of the new restrictions and fees.

Southwest used computer models and live tests to ensure the new policies wouldn’t slow down boarding and would get planes back in the the money-making air quickly.

“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, told CNBC.

Come Jan. 27, the hallmarks of Southwest’s open-seating policy — setting an alarm to secure a place in the boarding line, the A-B-C groups, the big stanchions marking off boarding order and the on-board scramble for a favorite seat — will be gone.

That all will be replaced by eight boarding groups, based on seat selection, status and other factors. The most loyal and biggest spenders will get on first, but seat location will determine boarding position. Here’s the order:

• The first two groups will include the top tiers of elite frequent flyers, and those with top classes of tickets.
• Groups three through eight will be for “Choice” and “Basic” ticketholders depending on their seat location.
• Credit card holders and Rapid Rewards credit card members will board no later than Group 5.

There will be two queues.

The airline didn’t disclose prices for seat assignments as an add-on fee, which on rival airlines, can vary depending on route and demand. Access to some seats will depend on the type of fare, and Southwest will sell standard seats, preferred seats and extra-legroom seats.

Southwest has been busy reconfiguring its Boeing planes to include extra-legroom seating. About 200 aircraft are complete, or about 25% of the fleet, a spokesman said. While those seats aren’t on sale yet, the airline has been selling earlier boarding to customers before their flight, which would increase their chances of getting extra-legroom seats.

Southwest customers have shown that sitting together is a priority, Shafer Modi told CNBC, while acknowledging that it will look different with the new boarding process.

“I think that if families want that sense of control, they have the optionality to pick their seats through … our existing products that we’re selling,” she said. “We will try to do our best to make sure that families are seated together no matter how they buy a ticket.”