5 takeaways from Southwest’s transformational plan like seating, new global partner, more

Southwest Airlines is making some major changes over the next three years.
On Thursday, the Dallas-based airline held an investor day at its headquarters to give updates regarding operations and changes that passengers and shareholders will start to see rollout as early as next year.
Southwest has dealt with lackluster financial performance over the last several years and the new modifications to the airline are an attempt to return to profitability. The changes arrive as activist investor Elliott Investment Management calls on the airline to act now and deliver returns on investments to shareholders.
The changes include a new assigned seating model, updates to the cabin, global airline partners and the introduction of a new travel search engine.
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Here are five takeaways from Thursday’s investor day.
Assigned seating was a “resounding message” from Southwest’s research, which showed it was the largest opportunity to broaden the airline’s appeal, according to Ryan Green, executive vice president of commercial transformation at Southwest. Assigned seating will start being sold in the second half of next year, and be ready to fly by the first half of 2026.
“We were struck by how clear the message was,” Green told investors. “There is an absolute need for us to evolve our model to better meet customer preferences.”
Similar to today, Green said, customers will purchase a ticket on Southwest as part of a bundle. Graduated seating and boarding benefits will be included in the fare bundles. Seat maps will be provided during the booking process, and seats with extended legroom or a preferred seat will be in the front of the cabin, he said.
Green said the airline expects about one-third of the seats on planes to have extended legroom.
The airline has not disclosed the price difference for these upgraded seats.
Southwest has begun the work to get the certification of its cabin reconfigurations from the Federal Aviation Administration, a process that takes months to complete. It plans to start retrofitting cabins in the first quarter of 2025, completing 50 to 100 retrofits a month, Green said, reducing that pace during the high-demand travel period of summer but staying on track to be completed by the end of 2025.
In partnership with RECARO, an aircraft seating firm founded in Fort Worth, Southwest is adding seats with its heart threaded through the interior and sunray pattern and an adjustable headrest cushion.
The air carrier is also working with design firm Tangerine to update cabin interiors for its deliveries next year. The aircraft will keep the Southwest blue while adding the carrier’s signature heart woven into the carpet. The upgrades are to include a personal electronic device holder.
It’s also adding Icelandair as its first international partner, with mutual customers flying in the first half of next year. The first U.S. gateway the airline will exchange customers through will be in Baltimore. Throughout next year, Green said, Southwest will expand the number of U.S. gateways on its network.
The vacation product will launch mid-2025, Green said. About 40% of vacation packages purchased by U.S. travelers are to six markets, including Las Vegas; Orlando, Fla.; Hawaii; and Cancun, where Southwest has a large presence.
Next month, the airline will add itself to Skyscanner, another tool for travelers to compare prices and book flights. Southwest joined other major airlines on Kayak and Google Flights earlier this year.
Southwest, which has traditionally held to keeping its airfares available on its website and mobile app, is now trying out search engines. It will allow customers to compare Southwest fares and flight times with competing carriers, which was more difficult before the company began partnering with third-party websites to sell tickets.
Southwest CEO Bob Jordan acknowledged the ongoing feud between minority stakeholder Elliott as well. Just this week, Elliott had laid out its intentions to call for a proxy fight, urging shareholders to prepare. Elliott has amassed 10% of voting shares in Southwest, the threshold required to call for a special shareholders meeting. Jordan said Southwest does not believe a proxy fight is “within the best interests of the company.”
That meeting could clean house of Southwest’s board through a special shareholders vote and instead enlist Elliott’s 10 candidates it has named. Board members could oust Jordan, something Elliott has been calling for since June.
Southwest made a preemptive move on Thursday, naming a new board member in former Spirit Airlines CEO Robert Fornaro, along with a $2.5 billion share repurchase program.
“For Elliott to call [Southwest’s] plan rushed and haphazard, in my opinion, is inane,” Jordan told investors. “We refuse to let anything distract us from running a safe and reliable operation. And I refuse to let Elliott distract from executing our plan, which I believe will create substantial value for Southwest and our shareholders.”