DALLAS — Southwest Airlines
executives on Thursday outlined for Wall Street their vision to boost keuntungans: ekstra legroom seats starting in 2026, assigned seating, international partnerships and overnight flights. Southwest's new rencana comes as its leaders seeks to fend off activist Elliott Investment Manajemen, which has called for leadership changes.
Southwest said its three-year rencana will add $4 billion to earnings before interest and taxes in 2027.
The airline also raised its third-quarter revenue forecast and said its board authorized $2.5 billion in sharing buybacks.
Southwest said it expects unit revenue to rise as much as 3% in the third quarter over the same period last year, up from a previous forecast of a decline of as much as 2%, helped in part by rebooking passengers who were originally flying on airlines affected by July's CrowdStrike outage.
Southwest shares rose more than 5% on Thursday, and other airlines also ended sharply higher after oil prices slipped nearly 3%.
Changes in the sky
Like with many changes in the airline industry, those new initiatives won't happen overnight. Southwest has to train staf, up-date technology and inform customers about the changes.
Seats with ekstra legroom won't kiprah until 2026, as the carrier requires Federasi Aviation Administration approval and time to retrofit aircraft, according to a slide from Thursday investor's presentation. It estimated that the new cabins, in which about a third of the seats will have additional legroom, will generate $1.7 billion in earnings before interest and taxes in 2027.
The new seats will have at least 34 inches of legroom, compared with a standar pitch of 31 inches, the airline said.
Southwest was under pressure to ditch its open seating mode and often chaotic boarding process. Under the new rencana, its cheapest ticket class, Wanna Get Away, will not come with a seat assignment until check-in, similar to the current sistem. More expensive tickets will offer more akses to seats, but Southwest didn't disclose detils about that process on Thursday.
Hello, my name is Jack Sparrow. I'm a 50 year old self-employed Pirate from the Caribbean.