Southwest Airlines is restructuring its business model by eliminating its long-standing policy of two free checked bags and unassigned seating. CEO Bob Jordan announced at the Bernstein Strategic Decisions Conference that these changes are projected to bring in $4.3 billion by 2026. New fees for checked bags will generate significant revenue, while assigned seating aims to attract customers who prefer premium choices. The shifting market demands come as budget airlines face profit declines due to increased costs and changing customer preferences post-pandemic.
Southwest's significant policy changes, including introducing bag fees and assigned seating, are projected to generate $4.3 billion, demonstrating the airline's shift to adapt to evolving customer demands.
CEO Bob Jordan highlighted that 85% of customers who avoid flying Southwest cite the lack of assigned seating as a key reason, indicating a strong market demand for this feature.
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