Southwest Airlines Ends 60-Year Open Seating Policy to Boost Revenue

Southwest Airlines (LUV) discontinued its open seating policy on January 26, 2026, marking a fundamental shift in its brand identity as it responds to investor pressure to improve profitability. The airline will now offer assigned seating with four new fare bundles including paid upgrades for preferred seats and priority boarding. The carrier reported Q3 2025 passenger revenue of $6.3 billion, a 1% year-over-year increase. Southwest shares traded at approximately $41.50 on January 27. The change follows the airline's 2024 elimination of free checked bags and aligns with industry trends toward premium offerings. While 80% of customers reportedly prefer assigned seats, some loyal flyers have expressed disappointment on social media, citing lost brand differentiation.