Southwest Airlines held its second-quarter earnings call today amidst significant revenue challenges and a campaign by an activist investor to change the current management and shift the airline's business model to resemble that of American Airlines, Delta, and United.
Before Elliott Capital’s near-$2 billion investment, Southwest had already been discussing changes to offer more premium products. The airline has been unable to capitalize on trends towards premium offerings and long-haul international flights due to misalignment between their product and route network with customer demands.
Southwest is expected to introduce extra legroom seats at the front of the cabin, referred to as Love Cabin. These seats would be assigned, potentially offering blocked middle seats for sale similar to Frontier Airlines' model. Additionally, Southwest plans to increase fleet utilization by offering redeye flights for the first time. New union contracts now allow for redeye operations without requiring nightly system resets.