Dive Brief:
- Southwest Airlines is making headway on its “Southwest. Even Better” plan as it looks to better meet customer demands through assigned seating and premium accommodations with extra legroom, company executives said on a Q4 earnings call Thursday.
- The airline plans to retrofit aircraft for premium seats midyear and is making and testing the necessary technological changes to sell premium and assigned seats. The carrier is on track to sell seat assignment in the second half of this year and operate flights with assigned and premium seating in the first half of 2026, said Ryan Green, EVP and chief transformation officer.
- As part of its strategic plan, the airline is partnering with international carriers and enhancing its loyalty program. In January, Southwest signed its first commercial agreement with Icelandair and is set to begin flights with Icelandair on Feb. 13, Green said.
Dive Insight:
Southwest’s plan promises to modernize its customer experience to boost profits, and efforts are already paying off, according to CEO Bob Jordan.
“We closed out 2024 with positive momentum from our revenue initiatives and the performance of our operation,” Jordan said in a prepared statement. “While we still have much work to do, we are pleased that the improvements from our tactical initiatives are materializing faster than expected, and our progress continues to be further supported by a constructive demand environment and industry backdrop.”
Operating revenue grew 3.3% year over year to $7 billion in the fourth quarter, according to the earnings release.
“We also expect to see revenue contribution from partnerships, Getaways and loyalty initiatives, most notably, in the fourth quarter,” Jordan said on the call.
Southwest plans to launch a reformulated vacations package, called Getaways by Southwest, later this year.
Southwest touted its operational performance, too. It had a 99.3% completion factor for the quarter and on-time performance hit 84.1%, the airline’s best since 2020, according to the earnings release. The airline’s trip net promoter score also hit 63.9, the highest it’s been since 2020.
The airline also amended its co-brand agreement with Chase to provide card members with updated benefits related to assigned and premium seating products.
“We're confident customers will value these benefits, and they will drive co-brand card acquisitions in the future,” Green said.
