Southwest CEO says no assigned seats -- for now
Southwest Airlines is looking at ways to boost revenue, but assigned seating is not among them. The discount carrier isn't about to start charging fees for checked bags or changed tickets, according to CEO Gary Kelly.
Questioned by Wall Street analysts about Southwest's resistance to hit travelers with the kind of fees that generate billions for competitors, he said Thursday in an earnings call: "Let me be very blunt. We are not looking at assigning seats right now. We are not talking about assigning seats now, and we're not talking about looking at it at sometime in the future, just trying to be very clear."
Kelly gave himself some wiggle room moments later, saying that while the carrier is developing a plan that doesn't require assigned seating, its new reservation system has Southwest "in a position where we can more realistically think about that."
The upshot? Known for allowing passengers to check bags for free, its open-seating planes and not charging for ticket changes, Southwest isn't about to muck up what has made the carrier and its brand.
"I don't think we need to change the essence of what Southwest Airlines is to still find opportunities to drive revenues," Kelly said.
Southwest earlier this month said it would end its longstanding practice of offering free peanuts on its flights in deference to people allergic to the snack.
While Southwest likes to proclaim itself as a fee-free airline, it has has for years offered passengers willing to pay $15 each way to go to the front when boarding. In 2013, it offered a variably priced priority-boarding option that lets travelers be among the first to get on the plane at the last minute.
The airline is recovering from a large hit to second-quarter revenue due to Southwest's first passenger fatality in the carrier's roughly 50 years in business.
Dallas-based Southwest said in a statement on Thursday that its revenue for every seat-mile is in line to climb as much as 1 percent in the quarter ending Sept. 30. The closely watched measure of demand and ticket prices had fallen 3 percent in the second quarter as Southwest stopped advertising for about a month after the deadly engine explosion in April.