Latest news with #SouthwestAirlines'
CNBC
01-08-2025
- Business
- CNBC
How much are Southwest's new assigned seats? It depends
Southwest Airlines' first assigned seats went on sale this week for flights starting Jan. 27 of next year. What you'll pay will vary. The price depends on the route, when you're traveling and where you sit. Selecting your ideal seats can add hundreds of dollars to the cost of a family vacation, similar to flying on other airlines. For example, a roundtrip ticket in the "Choice" ticket class — the second cheapest type of ticket — between Denver International Airport and Orlando International Airport leaving Feb. 14 and returning Feb. 21, which coincides with Presidents Day, was going for $692 on Southwest's website on Thursday. For seats the airline deems "preferred," it would be $46 for a window or aisle seat in Rows 7 to 13, or $41 for a middle seat in those rows. Customers with elite frequent-flyer status on the airline or with Southwest Airlines credit cards will be exempt from some of the fees. An extra-legroom seat, located in the first six rows of the Boeing 737 Max 8 aircraft, was going for $96 for window or aisle. Prices were similar, but slightly lower, for the return flight. Seat selection in the back of the plane in rows 17 through 30 are free of charge for a "Choice" ticket. The more expensive "Choice Preferred" ticket includes preferred row seats, while the priciest option, "Choice Extra" includes extra-legroom seats and also comes with a free "premium" beverage like an alcoholic drink. The same route, on the same days on United Airlines was $665, with extra-legroom seats varying from $105 to $126 each way and $37 to $42 for preferred seats. Th9e changes are all part of Southwest's plan to ditch the hallmarks of its more than half-century-old business model. For decades, that included open seating (and uniform legroom throughout the cabin) along with a quirky boarding system that led to a mad dash at the airport for a seat, and two free checked bags for all customers. Southwest's rivals have made billions on bag and seat fees, raising questions for years from investors and Wall Street analysts about whether the carrier was maximizing revenue. Last year, activist hedge fund Elliott Investment Management took a big stake in Southwest, calling for such changes, and leading to a board shakeup. Major U.S. carriers brought in $12.4 billion assigned-seating fees between 2018 and 2023, according to Senate panel report. Southwest's first-ever bag fees started with tickets sold in late May. The airline is charging $35 for a first checked bag and $45 for a second, roughly in line with other airlines. The carrier also joined rivals in launching a no-frills basic economy ticket, where customers don't get free, advanced seat selection, something Southwest expects it will benefit from next year, when seat assignments go into effect. "We assume there will be a positive impact in Q1 when we go to assigned seat, that's a more compelling buy-up from basic economy to Choice," Andrew Watterson, Southwest's chief operating officer, said on an earnings call last week. "However, should we succeed in making it a positive before then, that's an additional tailwind as we go throughout the second half." Southwest will reward its most loyal customers though, with choice seats as perks. Frequent flyers with top-tier A-List Preferred status on Southwest will get extra-legroom seats at booking, as well as two free checked bags, and A-List status-holders can book them 48 hours before departure, though there is no guarantee they'll be available. Both groups will have complimentary access to preferred seats. Several Southwest credit cards also provide access to preferred seats, regardless of the fare type.
Business Insider
30-07-2025
- Business
- Business Insider
Southwest Airlines Stock (LUV) Hits Q2 Turbulence
Southwest Airlines' (LUV) second-quarter 2025 earnings point to continued headwinds, triggering several downgrades from Wall Street analysts. The company reported sharp year-over-year declines in both net income and earnings per share alongside a drop in operating revenue. The market didn't like it one bit, punishing the stock over the past five days. Moreover, technical indications show there is further downside ahead, according to the most recent price data. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. A deeper look suggests that weaker domestic leisure travel demand, coupled with operational missteps, weighed on results. While some of these issues appear temporary and potentially fixable, they introduce near-term uncertainty—leading me to adopt a cautiously Neutral stance on the stock. Revenue and Profit Undershoot Hurt Southwest Southwest reported a 1.5% year-over-year decline in operating revenue, bringing the total to $7.2 billion for Q2. More notably, GAAP net income dropped 42% to $213 million, down from $367 million in the same quarter of 2024. Given that airlines typically operate on razor-thin margins, such a sharp decline in net income is particularly concerning. TipRanks data indicates that a key factor behind the revenue drop appears to be a 3.5% year-over-year decline in revenue passenger miles (RPMs), reflecting lower traffic and softer travel demand. Operational Metrics Underperform Taking a look under the hood, Southwest's key operational metrics fared no better. Revenue per available seat mile (RASM) decreased 3.1% year-over-year in Q2 2025. This was despite a 1.6% year-over-year increase in capacity, as measured in available seat miles (ASMs). This tells us that the increase in available seats did not translate into proportional revenue growth, meaning that Southwest was less efficient in its utilization of capacity. On the expense front, Cost per Available Seat Mile, which excludes fuel and oil expense, special items, and profit sharing (CASM-X), increased 4.7% year-over-year. Typically, increased capacity will distribute fixed costs over a larger operational base, reducing unit costs. This was not the case for Southwest. Cost-Push Inflation is Yet Another Obstacle For starters, like everyone else, Southwest is dealing with inflationary pressures, particularly those stemming from labor contracts ratified in 2024. Salaries and wages were up 8.8% year-over-year. The combination of rising non-fuel unit costs and the future recognition of fuel expenses from terminated hedging contracts could pressure Southwest's profitability for several quarters to come. Some of the blame falls on Southwest. For example, its recent introduction of the basic economy product caused a 'temporary reduction in the conversion rate of basic economy on its website.' This resulted in a 'nearly one-half point' impact on RASM. Recall that Southwest was known for its simple, all-inclusive fare structure, where everyone got two free checked bags and the ability to choose any available seat. The introduction of 'basic economy' did away with this, aligning with other major airlines that offer a tiered fare system. New Initiatives Boost Investor Hopes The short-term dip in conversion rates isn't entirely unexpected. Many customers were unfamiliar with the newly introduced bag policy, and Southwest's marketing efforts may not have clearly communicated its value. The company is now working to improve messaging, which should help normalize conversion over time. Alongside the discontinuation of its long-standing 'Bags Fly Free' policy, Southwest projects these initiatives could generate an additional $1.8 billion in EBIT for full-year 2025. However, these changes also carry the risk of customer pushback and potential damage to the brand's identity. Given that, it's reasonable to expect a delayed payoff. In the near term, Southwest's outlook remains underwhelming: for Q3, the company is guiding for flat revenue per available seat mile (RASM)—ranging from -2% to +2% year-over-year—and cost per available seat mile excluding fuel (CASM-X) is expected to rise between 3.5% and 5.5%. LUV Compared With Its Peers Since Southwest wishes to become more like its peers, let's compare its valuation. Southwest's P/E ratio of 49.9 trades at a 101% premium to its peers in the Industrials sector. This implies that investors anticipate a significant rebound in earnings. Should this not happen within a reasonable amount of time, Southwest's stock has plenty of room to fall. Is LUV a Good Buy Now? On Wall Street, LUV earns a consensus Hold rating with three Buy, six Hold, and four Sell ratings in the past three months. LUV's average stock price target of $31.25 implies a downside potential of 2.4% over the next twelve months. Earlier this week, Citi analyst Stephen Trent handed LUV a Sell rating with a price target of $22. The analyst expressed caution, noting 'The airline's current initiatives, such as assigned seating and checked bag fees, are expected to increase unit revenue, but the potential for a significant revenue boost in the fourth quarter of 2025 appears unlikely.' This skepticism is reinforced by weaker-than-expected second-quarter results and a soft third-quarter outlook, which suggest that the risk/reward balance for Southwest's shares is not favorable at present,' the analyst said in a research note. Southwest's Transformation Faces Turbulence Southwest is experiencing some bumps in its pursuit of long-term strategic transformation. A perfect storm of a challenging operating environment, inflationary pressures, and softer domestic leisure travel has squeezed profitability. The crux of the problem is that transforming a long-established brand during trying times is no easy task. Consequently, I'd like to see clear evidence that the benefits of the pivot outweigh the short-term operational and reputational costs before jumping aboard Southwest's stock.
Time of India
07-07-2025
- Business
- Time of India
Southwest Airlines policy update: Airline enters new era with bag fees and other changes. Check rates
Southwest Airlines has announced a lot of changes in the past few months with the latest one in March where it said it would end free checked baggage for most travelers. In March, Southwest announced that it would begin charging for checked bags, a move that brought it in line with most of its competitors. Long praised for its "Bags Fly Free" policy, Southwest Airlines' revised policy took effect on May 28, requiring the majority of passengers to pay for their first and second checked bags. Southwest Airlines' CEO Bob Jordan is doubling down on the company's controversial changes ending unassigned seating and free bags for most customers. According to Travel Weekly, the carrier, which long made its bags-fly-free policy a centerpiece of its commercial offering, will charge $35 for the first checked bag and $45 for a second bag. The fees will apply to flights booked or voluntarily changed on or after May 28. Play Video Play Skip Backward Skip Forward Mute Current Time 0:00 / Duration 0:00 Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions and subtitles off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Story To Hear ALSO READ: Pearl Jam drummer Matt Cameron announces heartbreaking departure after 27 'fantastic years', leaves fans stunned Under the new policy, holders of a Southwest co-branded credit card and flyers with Rapid Rewards A-list status will be entitled to one free checked bag. Travelers who book Southwest's top-level fare, Business Select, will continue to get two free checked bags, as will those with Rapid Reward A-list Preferred status. Live Events Why is Southwest Airlines changing policy? CEO Bob Jordan has repeatedly defended the changes and he did so again in a new interview with the New York Times on July 6. He explained that the change marks a major shift as the airline seeks new revenue and a wider customer base. Jordan explained the reasoning behind both the changes and their timing. That included addressing the elephant in the room, namely, the speed at which those changes were being rolled out. '[O]ther airlines went through these changes over a decade or more,' Jordan said. 'There is a bit of catch-up here because we're moving to that world, but in months, not a decade.' The CEO described the new baggage policy change as part of a broader transformation designed to meet evolving traveler expectations and improve Southwest's profitability. It is expected to net the airline $4 billion in profit, the report said. ALSO READ: Big revelation in Texas tragedy: Was 'flash flood' warning system scrapped before 27 died at Camp Mystic? "Customers today want a lot of choice, especially coming out of the pandemic. The customer's needs and wants are just different. The move to bag fees is really about choice," Jordan said in an interview with The New York Times. Jordan added: "Change is hard, and change is emotional. The needs of customers, employees and investors don't have to be at odds." He said that the changes were not solely driven by investor pressure but reflected broader industry trends and consumer behavior—almost all other U.S. airlines and many others around the world charge for taking bags. "There is a bit of catch-up here because we're moving to that world, but in months, not a decade," he said. Asked if cabin crews were excited about the addition of assigned seating, he said, "If in the open-seating world a family gets on and they can't sit together, the flight attendant is having to police that in the cabin,' he told the Times. 'Our open-seat boarding can cause a lot of pre-boards, and our agents are having to police that.' ALSO READ: Novak Djokovic's wife Jelena reacts to historic Wimbledon victory without using a word. Who is she? When asked about whether the changes reward frequent customers and potentially leave out those who don't fly Southwest as much, Jordan said the airline is "not abandoning anybody." "You are going to get great fares on Southwest Airlines, period," he continued. "My whole point is there's more coming to the strategy as we keep evolving, but it's all about staying true to who we are—best people, best hospitality, best service—while stretching the model to meet the needs of our customers." Why is this significant? Southwest Airlines, once known for standing out as the only major U.S. carrier offering two free checked bags to all passengers, has changed course. Under its new policy, Southwest now aligns with rivals like American, Delta, and United, which charge $35–$40 for the first checked bag and $45–$50 for the second. A Southwest spokesperson told Newsweek: "Southwest will be charging $35 for a first checked bag and $45 for a second checked bag (weight and size limits apply) for flights booked or voluntarily changed on or after May 28." However, Southwest still offers some perks: Business Select travelers and Rapid Rewards A-List Preferred members can continue to check two bags at no cost. A-List members and Southwest credit card holders will be allowed one free checked bag.
Yahoo
02-06-2025
- Business
- Yahoo
Southwest Airlines (NYSE:LUV) Announces First Trans-Pacific Partnership With China Airlines
Southwest Airlines is exploring a trans-Pacific partnership with China Airlines Group, marking a pioneering move for the company. During the last quarter, Southwest's stock rose 13%, a notable shift amidst broader market movements, including China-U.S. trade tensions affecting other sectors. While the market posted strong monthly gains, Southwest benefitted from positive corporate initiatives, like partnerships with China Airlines and Icelandair, which likely provided a counterbalance to broader market concerns. Additionally, Southwest's dividend of $0.18 per share and effective cost management activities, such as significant share buybacks, enhanced investor perception and stock performance. We've identified 1 weakness with Southwest Airlines and understanding the impact should be part of your investment process. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 25 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. Southwest Airlines' pioneering move to explore a trans-Pacific partnership with the China Airlines Group could play a crucial role in shaping its future operational landscape. By opening new avenues for international collaboration, this partnership has the potential to enhance revenue streams as the airline diversifies its market presence. This expansion aligns with ongoing strategies to boost operational efficiency and revenue through innovative distribution channels and seating options. Over the past year, Southwest Airlines' total shareholder return, including share price and dividends, was 23.42%. This reflects strong company performance despite industry challenges, showcasing resilience and growth. Within the US Airlines industry, Southwest has outperformed as seen by its higher return against the industry's 16.2% rise over the same timeframe. The introduction of new regional partnerships is anticipated by analysts to influence revenue and earnings forecasts positively. While the analysts have set a price target of US$28.39, slightly lower than the current share price of US$29.84, the modest 5.1% discount relative to this target provides a framework to evaluate expected performance against market estimates. These developments are likely to have a long-term impact on the company's revenue and profitability as they bolster adoption of its services across new and existing markets. Evaluate Southwest Airlines' historical performance by accessing our past performance report. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:LUV. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ 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
Yahoo
02-06-2025
- Business
- Yahoo
Southwest Airlines (NYSE:LUV) Announces First Trans-Pacific Partnership With China Airlines
Southwest Airlines is exploring a trans-Pacific partnership with China Airlines Group, marking a pioneering move for the company. During the last quarter, Southwest's stock rose 13%, a notable shift amidst broader market movements, including China-U.S. trade tensions affecting other sectors. While the market posted strong monthly gains, Southwest benefitted from positive corporate initiatives, like partnerships with China Airlines and Icelandair, which likely provided a counterbalance to broader market concerns. Additionally, Southwest's dividend of $0.18 per share and effective cost management activities, such as significant share buybacks, enhanced investor perception and stock performance. We've identified 1 weakness with Southwest Airlines and understanding the impact should be part of your investment process. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 25 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. Southwest Airlines' pioneering move to explore a trans-Pacific partnership with the China Airlines Group could play a crucial role in shaping its future operational landscape. By opening new avenues for international collaboration, this partnership has the potential to enhance revenue streams as the airline diversifies its market presence. This expansion aligns with ongoing strategies to boost operational efficiency and revenue through innovative distribution channels and seating options. Over the past year, Southwest Airlines' total shareholder return, including share price and dividends, was 23.42%. This reflects strong company performance despite industry challenges, showcasing resilience and growth. Within the US Airlines industry, Southwest has outperformed as seen by its higher return against the industry's 16.2% rise over the same timeframe. The introduction of new regional partnerships is anticipated by analysts to influence revenue and earnings forecasts positively. While the analysts have set a price target of US$28.39, slightly lower than the current share price of US$29.84, the modest 5.1% discount relative to this target provides a framework to evaluate expected performance against market estimates. These developments are likely to have a long-term impact on the company's revenue and profitability as they bolster adoption of its services across new and existing markets. Evaluate Southwest Airlines' historical performance by accessing our past performance report. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:LUV. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@
