In this week’s news, Southwest Airlines has announced details of its coming operational changes but pledges to keep its free checked-bag policy as it prepares to confront a challenge from a major shareholder for control of the company; Delta Air Lines unveils its largest-ever transatlantic schedule for next summer and starts code-sharing with Scandinavian Airlines; there’s more international news from Cathay Pacific, Philippine Airlines, Emirates and Air France; Southwest adds a Sacramento route next week and Alaska Airlines expands its California operations; Hawaiian Airlines says Starlink satellite Wi-Fi is now available on all its Airbus planes and Air France plans to add the service starting next year; Alaska overhauls its Flight Pass flat-fee ticketing product; American Airlines adds a South American carrier to its AAdvantage program; JetBlue Airways drops a big perk for its most elite frequent flyers; and Delta is expected to open a new premium lounge at LAX next month.
Southwest Airlines this week outlined big changes coming to its business plan — but also promised to preserve its policy of two free checked bags for all passengers — after activist hedge fund Elliott Investment Management announced plans to call a shareholder meeting as its next big step to take control of the company and force even more changes.
At an Investor Day conference in Dallas, Southwest provided details for its recently announced plans to introduce premium seats and adopt an assigned seating policy next year. The airline also said it will develop partnerships with international carriers — starting with Icelandair — and will introduce a packaged vacation line and changes to its Rapid Rewards loyalty program and its credit card.
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Southwest Airlines CEO Bob Jordan responds to questions during a news conference at the company’s headquarters in Dallas, Thursday, Sept. 26, 2024.
But some things are not slated to change. Southwest said its “Bags Fly Free” policy, allowing all customers to check up to two bags for no fee, will remain in place. “Based on Southwest’s research, the company believes that any change in the current policy that provides every customer two free checked bags would drive down demand and far outweigh any revenue gains created by imposing and collecting bag fees,” the carrier said.
In a separate statement this week, Southwest also vowed to fight Elliott’s efforts to take control of the airline. It said it will not remove its CEO Bob Jordan, as Elliott has repeatedly demanded, and it will resist attempts to remake its board of directors. “Any Leadership change amid such a significant transformation would be detrimental to all Shareholders, and handing control of the Board to Elliott and its director candidates – when Elliott has not articulated any ideas for improving Southwest’s business plan and operations – would present a catastrophic risk to Shareholders,” Southwest said.
Elliott, which holds a stake of about 11% in the airline, has been pushing for the firing of Southwest’s top management and wants to place 10 independent candidates on the company’s board of directors, giving it control. Southwest’s executive chairman has already agreed to step down next year and several directors are slated to resign in November, but Elliott said in a letter to Southwest shareholders this week it intends to “call a special meeting in the coming weeks” where it will present its plans for an overhaul of the carrier’s management and business model, seeking approval to install new directors.
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Southwest told investors it will begin selling assigned seats in the second half of next year, and operating flights with assigned seating early in 2026. “Airline passengers now have a clear preference for seat assignments: 80 percent of Southwest customers and 86 percent of passengers who choose other airlines want assigned seats,” Southwest said. It didn’t provide........