Southwest Sets Date for Assigned Seating, Launches New Boarding Process
Southwest Airlines announced Monday assigned seating will go into effect on January 27, 2026.
With the new changes, Southwest also plans to use a new boarding process, bringing an end to its decades-long open boarding process, which had widely differentiated the airline from its competitors.
Southwest said the new boarding pro
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USA Today
16 hours ago
- USA Today
Southwest Airlines CEO: Company could eventually introduce lounges, long-haul flights
Against the backdrop of lower than expected earnings, Southwest Airlines CEO Bob Jordan hinted that the carrier will be doing more in the future to change its business model and become more like its U.S. competitors. Southwest reported earnings of $7.24 billion in the second quarter, though analysts previously expected the figure to be closer to $7.29 billion. Some of those changes could even include introducing lounges or expanding its fleet to serve destinations that are farther-afield from its current, domestically-focused network. "I want to reiterate that our current initiatives are not the endpoint in our product strategy and evolution. As we've stated before, we are committed to evolving further to meet the needs of our current and our future customers," Jordan said during the company's second quarter earnings call, which took place July 24. Southwest has already introduced checked bag fees and announced that it will officially introduce assigned and extra legroom seating in January 2026. Tickets for those flights go on sale next week. While those and other changes make Southwest more like other airlines, Jordan said they're just the first step in the company's overhaul. Among the "limited number of things" he said the airline can do down the road to capture more traveler demand are steps like introducing lounges or expanding the network by adding longer-range planes to its fleet. While Jordan acknowledged Southwest has no current plans to implement any of those measures, he said, "we're going to follow the customer and work very hard to give you reasons not to split your wallet," meaning to make Southwest more of a one-stop shop for airline customers. Contributing: Reuters Zach Wichter is a travel reporter and writes the Cruising Altitude column for USA TODAY. He is based in New York and you can reach him at zwichter@
Forbes
17 hours ago
- Forbes
Southwest Stock Down 12% After Company Slashes Profit Outlook
Southwest Airlines deeply slashed its profit outlook for 2025, blaming weak domestic demand as it pushes forward with 'transformational' changes driven by an activist hedge fund investor. Southwest Airlines stock plummeted Thursday after the company slashed its profit outlook for the ... More year. getty Southwest's share price was down more than 12% early Thursday afternoon after the carrier cut its forecast for full-year earnings before taxes to $600 million to $800 million—53% to 65% below its earlier estimate of $1.7 billion. The Dallas-based carrier missed Wall Street's second-quarter earnings consensus estimates by 16%. Even so, Southwest executives said travel demand has begun to stabilize compared to April, when the carrier pulled its 2025 financial guidance due to economic uncertainty in the wake of President Donald Trump's 'Liberation Day' tariffs. The airline's executives noted weaker demand for domestic main cabin (economy) leisure travel this year—echoing what Delta, United and American reported. Southwest Airlines is undergoing what CEO Bob Jordan characterized to investors on its quarterly earnings call Thursday as a 'transformational period.' In June 2024, Southwest became the target of activist hedge fund investor Elliott Investment Management, which took a $1.9 billion stake in the carrier and presented a plan to achieve a $49 price per share 'within 12 months.' While far from a majority, Elliott's roughly 11% interest in the company was enough to give it an outsized voice as one of the airline's largest single shareholders. The next month, Southwest conceded to many of Elliott's key asks and announced sweeping changes to its business model, including ditching its half-century open seating model in favor of assigned seats; offering premium, extended legroom seats; and introducing overnight 'red-eye' flights. By October, Southwest had agreed to restructure its board to avert a proxy fight. Southwest's share price was about $33 on Thursday afternoon. 'We anticipate [Southwest] will remain a controversial stock,' Savanthi Syth, an analyst at Raymond James covering the airline sector, wrote to investors, noting Southwest also announced a new $2 billion share buyback program to be completed in up to two years. Is Air Travel Demand Down Everywhere In The World? No. In May, the global airline industry reported 5% growth in demand compared to the same month last year, with Asia-Pacific taking the lead at 9.4% growth. 'The outlier was North America, which reported a 0.5% decline, led by a 1.7% fall in the US domestic market,' according to the latest monthly report from the International Air Transport Association (IATA). While U.S. airlines say they see increased domestic demand later in the year, it's not known how Trump's raft of tariffs—due to kick in Aug. 1—will impact consumer confidence. Typically, tariffs lead to higher inflation, which tends to contract discretionary spending on items like vacations. Have Doge Cuts Impacted Southwest's Business? In a Securities and Exchange Commission filing in March, Southwest cited 'less government travel' as one reason for lowering its full-year outlook. Further Reading American Airlines Stock Down 8% As Weak Domestic Demand Dims Outlook (Forbes)
Yahoo
18 hours ago
- Yahoo
Why Southwest Airlines Stock Tumbled Today
Key Points Southwest missed on sales and earnings last night. Revenues slipped only slightly year over year, but profits were down a big 33%. Southwest has announced a buyback of its stock, forecasting better profits ahead. 10 stocks we like better than Southwest Airlines › Southwest Airlines (NYSE: LUV) stock crashed 11.9% through 11:30 a.m. ET Thursday after missing analyst targets for both sales and earnings last night. Heading into the Q2 report, Wall Street expected the airline to report at least $0.51 per share in adjusted profit on quarterly sales of $7.29 billion. Southwest said earnings were actually only $0.43, however, and sales were only $7.24 billion. Southwest Airlines Q2 earnings It gets worse. The $0.43 was what Southwest would have earned but for "one-time" expenses. But actual earnings as calculated according to generally accepted accounting principles (GAAP) were only $0.39 per share, down 33% from one year ago, and on a revenue decline of only 1.5%! So clearly Southwest's profit margins declined, but why? Fuel costs fell dramatically from Q2 2024, so that wasn't the problem. Salaries, wages, and benefits, on the other hand, grew 9%, and landing fees were up 11%. These were the two biggest changes dragging down results -- and not even Southwest's unpopular decision to start charging extra for luggage was enough to offset them. Is Southwest stock a sell? Turning to guidance, Southwest says it will earn at least $600 million this year, not counting interest on its debt and taxes. With this prospect in mind, management thinks its stock a bargain, and announced a $2 billion stock buyback (which will see even more shares retired after today's sell-off). But is buying Southwest stock a good idea? Priced at 39x earnings, the stock looks expensive. Still, earnings growth could be robust, with analysts forecasting doubled profits next year -- $2.25 per share -- and more growth beyond that. At 15 times forward earnings, no net debt, and paying a respectable 1.9% dividend yield, Southwest stock could be a "buy" in the making. Should you buy stock in Southwest Airlines right now? Before you buy stock in Southwest Airlines, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Southwest Airlines wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $634,627!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,046,799!* Now, it's worth noting Stock Advisor's total average return is 1,037% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy. Why Southwest Airlines Stock Tumbled Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
