Southwest Airlines reveals how new boarding process will work

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and Southwest Airlines making big changes.

Transcript

00:00I'm Conway Gittins reporting from the New York Stock Exchange.

00:03Here's what we're watching on the street today.

00:05Fresh data released Friday seemed

00:06to support the Federal Reserve's September rate cut.

00:09The Personal Consumption Expenditures Index

00:11showed inflation rose 2.2% in August compared to a year ago,

00:16down from 2.5% in July.

00:18That move brought the Fed's preferred inflation measure

00:21even closer to its 2% target.

00:25In other news, there's good news for people considering

00:28a flight on Southwest Airlines.

00:30The company confirms that it will not

00:32start charging baggage fees.

00:34Right now, the airline lets passengers check in two bags

00:37at no cost, while most airlines charge at least $35

00:41for the first bag.

00:42In just the first six months of 2024,

00:44airlines collected $3.7 billion in checked bag fees,

00:48according to the Bureau of Transportation Statistics.

00:51Southwest, quote, believes any change in the current policy

00:55would drive down demand and far outweigh any revenue gains

00:59created by imposing and collecting bag fees.

01:02The airline is also betting that by keeping its, quote,

01:05bags fly free policy, fuel passengers

01:08will bring bags on the plane,

01:09which makes plane boarding smoother and faster.

01:13That last point is important,

01:15since Southwest also announced a delay

01:17in getting rid of open seating.

01:19The airline said assigned seating

01:21will not officially kick in until 2026,

01:25with ticket purchases beginning in late 2025.

01:28Southwest admits 80% of its customers

01:31and 86% of the flying public prefer assigned seats.

01:36One of the reasons for the delay

01:37has to do with Southwest other plan

01:39to introduce premium seating,

01:41which means planes have to be reconfigured,

01:43and that takes time.

01:45Southwest management is under pressure

01:47to shake things up after a drop in revenue.

01:50That'll do it for your daily briefing

01:51from the New York Stock Exchange.

01:53I'm Conway Gittins with The Street.

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