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Is Open Seating Losing Altitude at Southwest?

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Is Open Seating Losing Altitude at Southwest?

Is Open Seating Losing Altitude at Southwest?
December 29
09:03 2015

MIAMI — Southwest Airlines has earned a reputation as a bit of a contrarian. Unlike its legacy competitors, the airline allows two bags to fly free, refuses to implement change fees, and focuses more heavily on “point-to-point” flying rather than feeding travelers through hubs. And nowhere is Southwest’s rather different approach more evident than in its “open seating” policy.

While all of its major rivals issue fliers an assigned seat, Southwest continues to open up the cabin to its customers, allowing the choice of seats as passengers board the aircraft. This policy does not fly without some controversy, as while popular with some, many of Southwest’s patrons would prefer an assigned seat. And rather quietly, Southwest has been upgrading its technology which would allow it to issue assigned seats within the next three to five years.
Speaking recently at a luncheon at The Wings Club in Manhattan, CEO Gary Kelly reaffirmed that Southwest has no intention to begin assigning seats as a result of its upgraded technology. “We are not planning on making those changes,” he said, according to a Skift report. The airline’s media team followed up by hammering home the point to USA Today’s Road Warrior Voices, stating that Southwest is neither “considering any of these product changes imminently” nor “has plans to even consider those options.” Clearly, it seems that open seating will remain the standard at Southwest, at least for the near future.

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However, the recent developments beg the question: should Southwest move away from open seating in favor of an assigned seating approach? In this article, we hope to flesh out some of the benefits and drawbacks of doing so for Southwest.

With Southwest’s major rivals unanimously opting for assigned seating policies, it would appear that following in their footsteps would offer some advantage for Southwest. One of the more obvious benefits associated with assigned seating is a sense of certainty for the airline’s passengers. Many Southwest fliers voice frustration over the chaotic scramble for a seat once on board, leading many to brand the airline’s method as a “cattle car” experience. Undoubtedly, a sizable segment of Southwest’s fliers would prefer simply knowing where to go upon stepping through the aircraft’s doors.

Additionally, by not assigning seats, Southwest bypasses a potential revenue stream. Most of the U.S. majors charge some fee for pre-selecting a seat, allowing them to capitalize on consumers’ desire for certainty. This is especially true for business fliers (an audience, by the way, which Southwest is more heavily pursuing) and larger families, who are more likely willing to pay a bit extra to lock-in sitting together. Southwest obviously cannot take advantage of this potential revenue stream if it cannot guarantee certain seats in the first place.

Southwest’s moves to bulk up its technology illustrates that these points are weighing heavily on the airline. After all, Southwest would not undertake the expense of a technology upgrade if it did not at least see assigning seats as a possibility.

But Southwest’s revolutionary open seating approach offers it some clear benefits as well, evidenced partially by its firm adherence to the policy throughout the airline’s storied history. Namely, the policy carries operational pluses, allowing Southwest to board its planes more quickly than its rivals. Numerous studies suggest that Southwest’s “random” boarding method, considered the industry “gold standard,” consistently leads to a speedier process than any of the more complex methods in existence at other airlines. Faster boarding helps translate into more on-time departures (an area in which Southwest is historically strong, albeit wavering at the moment), which translates into money saved.

Secondly, the airline’s open seating policy serves as an important point of distinction between Southwest and its legacy competitors. Southwest touts itself as a “low-cost-carrier,” a different breed of airline than what the major legacy carriers feature. Backtracking on its seating policy would move Southwest closer along the spectrum to the experience provided by its major competitors. Southwest has built up a substantial cult-like following of loyal fliers, which it would jeopardize to some degree if it should toss out those elements which make flying on its Heart-themed jets unique.

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For as often as its open seating stance creates some confusion for novice travelers, it serves as a source of endearment to its loyal patrons. At the very least, Southwest should carefully consider the potential backlash associated with trashing one of its mainstay features.

Also, while Southwest misses out on the chance to extract more ancillary revenue from assigning seats, the airline instead collects fees from those willing to purchase its “Early Bird Check-In” option. For $12.50, the airline sells expedited check-in privileges exactly twenty-four hours prior to departure, which guarantees those willing to pay a better boarding position. This essentially represents a substitute for pre-assigned seating fees, as it ensures passengers a high degree of seat choice upon boarding.

The airline also guarantees a top-fifteen boarding position (A1-A15) for $40, representing another optional surcharge through which Southwest generates revenue. Although Southwest might possibly generate more revenue by assigning seats, it hardly misses the boat with its current system.

Finally, though fliers saddled with a late-C boarding pass are quick to complain, Southwest’s method of distributing boarding positions effectively matches those who most value boarding earlier with a better spot. Passengers may check-in for their flights up to twenty-four hours in advance, and the system allots a boarding number in order of those who check-in first. This “first-come, first-serve” approach promises that those careful enough and willing enough to check-in promptly will earn the most optimal spot. Fliers who bemoan Southwest’s unique system but delayed checking-in for their flights until arriving at the airport clearly did not value their seat selection highly enough, and would have been the same people unlikely to pay for prior seat selection at any other carrier.

Increasingly it seems, travelers are making the call for Southwest to abandon its open seating roots. This is feedback that Southwest should not take lightly. At the end of the day, Southwest must continually reevaluate all its policies to determine that they match both the preferences of fliers and its own financial goals, regardless of tradition. For its part, Southwest says that it’s thoroughly studied both approaches, and (while having tweaked its procedures slightly over the years) continually comes to the same conclusion.

While still an open question, it does appear that the benefits of open seating outweigh the costs for Southwest. And it certainly appears Southwest knows how to best run its business, to which Southwest’s run of over forty consecutive profitable years would attest. Perhaps open seating may be Southwest’s holdout facing the most turbulence, and could be the first to eventually go. But unless the airline can convincingly say that grounding the policy will yield material financial benefits without sacrificing any built up long-term value among its customers, Southwest would best stick with the strategy that built it. 

Open seating is flying high at Southwest Airlines, and expect an open cabin on a Southwest flight near you for the foreseeable future. 

 

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About Author

Alex McIntyre

Alex McIntyre

Texan. Airways Business Analyst. Emory University student, and lifelong AvGeek. Favorite airport and aircraft are: Dallas/Fort Worth International Airport and the Boeing 787. Passionate about all things commercial in the airline business, including route networks and hub operations. I love the window seat.

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