Southwest Airlines is shaking up its iconic business model, ending over 50 years of open seating with a bold transition set for early 2025.
According to CNBC, this major pivot, starting January 27, 2025, includes assigned seating, new fare types, and checked bag fees, all aimed at boosting revenue to rival more profitable competitors.
About a year ago, Southwest first hinted at abandoning its open seating policy, a hallmark that set it apart from other airlines. This unique approach, paired with two free checked bags, defined the carrier’s identity for decades. But change was brewing, and the airline finally confirmed the shift with a specific date.
On January 27, 2025, passengers will fly with assigned seats for the first time in the airline’s history. Customers eager to secure their spots can start buying tickets with assigned seating as early as July 29, 2025.
In March 2025, Southwest shared that this overhaul, alongside other initiatives, is projected to add $800 million to earnings before interest and taxes in 2025, and a whopping $1.7 billion in 2026. That’s a hefty financial incentive driving this transformation.
Also in March 2025, the airline announced it would begin charging many customers for checked bags, breaking from its long-standing free baggage perk. By spring 2025, new fare categories were introduced, reshaping how travelers choose their tickets. Top-tier customers, however, dodge many of these new fees and restrictions.
Come January 27, 2025, the familiar scramble for seats, A-B-C boarding groups, and line positions will vanish. Southwest has crafted a new system with eight boarding groups based on seat selection, status, and other criteria.
The first two groups prioritize elite frequent flyers and premium ticket holders, ensuring loyal customers get first dibs. Groups three through eight cater to “Choice” and “Basic” ticketholders, with placement tied to seat location.
Credit card holders and Rapid Rewards members won’t board later than Group 5, a nod to their status. Two queues will streamline the process, a shift from the old free-for-all. Southwest used computer models and live tests to ensure this won’t slow down turnarounds, keeping planes in the air efficiently.
Southwest will offer standard, preferred, and extra-legroom seats, with access varying by fare type. While prices for seat assignments as an add-on remain undisclosed, they’ll differ across fare categories.
About 25% of the fleet—roughly 200 Boeing aircraft—has been reconfigured for extra-legroom seating. These seats aren’t on sale yet, though earlier boarding options are available to boost chances of snagging them.
“We wanted to make sure that, as we designed a boarding construct that sort of paired well with assigned seating, that we were optimizing for efficiency,” said Stephanie Shafer Modi, managing director of fares and ancillary products at Southwest.
“[We’re] also balancing that with making sure that we’re taking care of our most loyal customers,” Modi added. On families traveling together, Modi noted, “We will try to do our best to make sure that families are seated together no matter how they buy a ticket.”
For investors and financially savvy travelers, Southwest’s pivot signals a push for profitability in a cutthroat industry. While the end of free perks like open seating and checked bags may sting, the projected earnings boost shows a company adapting to market realities. Keep an eye on fare trends and loyalty perks—there may be opportunities to save or invest in airline stocks as this unfolds.