Southwest Airlines is open to changing its business model to
include seat assignments, CEO Gary Kelly said Thursday.
"It is something we could consider in the future,"
Kelly said on the carrier's second-quarter earnings call. "It ain't
happening now, and it won't happen next year. I don't know why I would want to
predict something beyond 18 months, so I won't."
He added that Southwest executives aren't even engaged in
discussions about assigned seats at present.
Under its longstanding business model, Southwest assigns
passengers with a boarding position, but then allows individuals to choose
their seats once on the plane. Flyers can pay extra for an early boarding
position to guarantee they can find seats next to a traveling companion or in a
desirable location, such as on an aisle or window.
The airline flies with only one cabin class.
During the course of the earnings call, Kelly said that
Southwest will soon unveil initiatives facilitated by the improved technical
capabilities of its new reservations system. But he offered no specifics on
what those initiatives will be.
Those vague hints led stock analysts and reporters to pose
questions about various potential business model changes.
Kelly left no wiggle room on other characteristics that
distinguish Southwest from all other U.S. airlines. Bag fees and ticket change
fees aren't on the table. But he did acknowledge that by not having assigned
seats, Southwest loses out on a proportion of business travelers.
"There are absolutely customers who demand assigned
seating," Kelly said.
Southwest president Tom Nealon noted that the carrier tested
assigned seating on flights out of San Diego in 2005. Southwest, Nealon said,
is not immutable to change.
But Kelly said that the airline's highly differentiated
business model has helped it achieve one of the strongest brand identities in
the airline industry.
"I don't like the saying 'if it aint' broke don't fix
it,' but it certainly ain't broke," he said.