January 24: Southwest Finishes 737-700 Refits, Assigned Seating Nears
Southwest assigned seating starts January 27 as the airline finishes its 737-700 retrofit ahead of schedule. The shift brings paid extra legroom rows and new fare bundles aimed at lifting ancillary revenue. For investors, Southwest Airlines LUV enters 2026 with a cleaner cabin plan, but also fresh pricing questions. We break down how monetized seating could affect unit revenue, what a slightly tighter seat map means for costs, and how travelers in the US might respond.
The retrofit is done and the countdown begins
Southwest completed its 737-700 interior reconfigurations ahead of schedule, clearing a key operational hurdle before the policy change. A standardized cabin across the -700 fleet should simplify planning and reduce surprises for crews. Early completion also gives revenue teams time to test seat maps and pricing rules before peak spring travel. Simple Flying confirmed the work is complete.
Southwest assigned seating takes effect January 27, replacing the long-running open seating model. Travelers will select specific seats during booking or check-in, with extra legroom options available for purchase. Airports in the US should see clearer boarding groups and fewer aisle stand-offs. For travelers, the key is earlier seat selection to secure preferred spots, per Milwaukee Journal Sentinel.
With the 737-700 retrofit complete, Southwest enters the seating change with fewer variable cabin layouts. That should support smoother turn times and more predictable on-time performance during the transition. A consistent seat map also helps revenue management train algorithms on take rates and no-shows faster. For investors, fewer operational disruptions reduce the risk that implementation noise muddies early revenue signals.
Monetizing seats and testing fare bundles
Southwest extra legroom seats are set to be sold, concentrating near the front and in exit rows. The upsell creates a visible value ladder for customers who want space or quicker deplaning. Expect dynamic pricing by route, day, and load factor. The airline can tweak seat inventory week by week, improving control of merchandising without a full cabin reconfiguration.
New Southwest fare bundles are designed to make choices simple, grouping benefits like seat selection and priority services. For customers, bundles reduce guesswork. For revenue teams, bundles can improve attachment rates and raise average fare. Southwest assigned seating gives these bundles a clear anchor, letting the carrier align perks with seat locations that customers value most.
Paid seating and bundles should lift ancillary revenue per passenger and support higher unit revenue in peak periods. The key metrics to watch are paid seat take rates, bundle mix, and conversion at booking versus check-in. If Southwest assigned seating nudges more passengers to buy location or space, the airline can add revenue without changing the base schedule.
Capacity, costs, and demand signals to track
The 737-700 retrofit is expected to trim capacity slightly to make room for Southwest extra legroom seats. Fewer seats can lift cost per seat but may raise yield if customers pay for space and placement. For investors, the trade-off works if ancillary gains offset the seat reduction, especially on high-demand US business and leisure routes.
Some travelers liked open seating and may push back against new fees or changes. Early sentiment could be mixed as customers learn the rules and pricing. We will watch complaint ratios, Net Promoter Score, and rebooking behavior. If Southwest assigned seating improves certainty and boarding flow, satisfaction may stabilize after the first few weeks.
Focus on three data points: ancillary revenue per passenger, unit revenue guidance around spring break, and on-time performance during the rollout. Load factors on retrofitted 737-700 flights will show if seat maps match demand. If Southwest fare bundles and paid seats convert well, management could lean into further merchandising by summer.
Final Thoughts
Southwest assigned seating starts January 27, backed by a completed 737-700 retrofit and a clearer merchandising plan. For investors, the thesis is simple. Paid extra legroom, location upsells, and Southwest fare bundles can raise ancillary revenue without large schedule changes. The offset is a slight seat count reduction on 737-700 aircraft and near-term learning curves for customers. Our takeaway: track paid seat take rates, bundle attachment, and RASM guidance across March and April. If uptake is strong and operations stay smooth, the model supports higher revenue quality into summer. If sentiment sours, expect targeted pricing tests rather than a strategic reversal.
FAQs
When does Southwest assigned seating begin?
Southwest assigned seating begins January 27. Customers will choose specific seats during booking or check-in instead of lining up for open seating. Expect earlier decisions on seat location, especially for families and groups that want to sit together. Arriving late to seat selection may limit options on busy flights.
Will seat selection cost extra on Southwest?
Standard seats will be included in the booking flow, but Southwest extra legroom seats and preferred locations will be sold for an added fee. Prices can vary by route, date, and demand. Buying earlier generally improves choice, while last-minute changes may cost more or offer fewer options.
How could this change affect Southwest’s revenue?
Paid seating, location upsells, and Southwest fare bundles should lift ancillary revenue per passenger. If customers value space and placement, unit revenue can rise even with a slight seat reduction on 737-700 aircraft. Watch take rates, bundle mix, and RASM commentary in upcoming updates for proof of traction.
Does the 737-700 retrofit reduce capacity?
Yes, the 737-700 retrofit is expected to slightly reduce seats to make room for Southwest extra legroom seats and clearer layouts. The trade-off aims to improve yield through paid seating and better merchandising. Investors should watch whether ancillary gains offset the smaller seat count on key US routes.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
