A Southwest Airlines commercial airliner took off from Las Vegas on February 8, 2024.
Mike Black | Reuters
Southwest Airlines Chief Executive Bob Jordan said the company is ready to adapt to changing customer trends, such as premium seating, as pressure from activist investors mounts.
“We will adjust as customer needs change,” Jordan said Wednesday at an industry event hosted by Politico.
Jordan’s comments came two days after hedge fund Elliott Management disclosed a $1.9 billion stake in Southwest and said the airline needed a new CEO and chairman.
Jordan told investors in April that the airline was considering major changes to its product, possibly abandoning its unassigned seat system that differentiated the Dallas-based carrier among airlines and even re-evaluating its single seats. Cabin service.
Jordan reiterated those considerations Wednesday, saying the airline, which began operating in 1971 and now carries more passengers in the United States than any other airline, is in its “third generation.” He said the airline’s leadership was open to a major shift to boost revenue, while rivals such as delta and Unity Take advantage of customers who are willing to pay more for more spacious seats or other perks.
Elliott did not immediately respond to a request for comment on Jordan’s remarks Wednesday.
Southwest said Monday in response to the activist campaign that its board supports the company’s leaders and corporate strategy but also “looks forward to further conversations” with Elliott.
Southwest’s profit margins are tighter than those of some rivals as it faces increased U.S. airline capacity, shifting post-pandemic travel patterns and an uncontrollable spiral: delayed deliveries of new planes from its sole aircraft supplier, Boeing Co. , the company is grappling with several manufacturing and safety crises.
It also took Southwest several months to find its footing, and the year-end holiday crisis in 2022 cost the airline more than $1 billion. The company later admitted its technology could not handle the hundreds of flight and crew changes it triggered A winter storm prompted a rapid upgrade of the system.
In the meantime, Jordan said Southwest will continue to work to improve the customer experience. It upgraded in-flight Wi-Fi and added power outlets to its fleet boeing company 737 aircraft in recent years.
“I think customer preferences extend beyond that,” Jordan said Wednesday. He added that the airline had spent months surveying customers to find out what changes were needed.
“It has been several years since we last looked at this issue in depth, and customer preferences and expectations change over time,” an airline spokesperson told CNBC. “We are also looking at any potential changes to our operations. and financial benefits.”
—CNBC’s Rohan Goswami contributed to this article.
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