Southwest May Permit Assigned Seats

Southwest Airlines Co., the most profitable U.S. carrier, is making changes to its reservation system that would allow it to begin assigning seats for the first time.

Southwest is "not on any timeline" to decide whether to end first-come, first-served boarding, Chief Executive Officer Gary Kelly said. The carrier, the only major U.S. airline that doesn't match passengers to seats, will finish the computer changes this year.

"We've got to get comfortable that we're going to generate more revenue by assigning seats," Kelly said on Monday in an interview. "If we get comfortable that we can improve customer service, based on what our customers think, and we can become more efficient, it's a home run."

Assigned seating would be the latest move away from the basic model that has helped Dallas-based Southwest remain profitable every quarter since April 1991. Southwest began its first marketing alliance with another carrier last year, is considering international flights and now uses higher-cost airports such as Denver.

The lack of assigned seating is passengers' chief complaint about Southwest, said David Stempler, president of Potomac, Maryland-based Air Travelers Association, a consumer group.

"It's something that just sticks in the craw of a lot of passengers," Stempler said. "Most people just don't like it, especially with the other low-cost carriers providing assigned seating."

Southwest won't change its boarding process this year or in 2007, Kelly said. A decision about doing so may come this year, he added. Kelly estimated the computer-system changes would cost less than $5 million.

Southwest, the largest low-fare, low-cost carrier, wants the technology in place so that it can implement any change quickly, Kelly said. When the airline decided to start the alliance, with ATA Holdings Corp., it had to delay the so-called code share while it changed its computer systems, he said.

"For the effort it takes for us to have that tool in our war chest, it's just not worth the risk of not having it," Kelly said of being able to assign seats. "We've been very unique, and that has been a great advantage. But sometimes it actually works against us."

Southwest passengers now are assigned to one of three boarding groups when they check in, and are allowed to select any seat once they're on the plane. Southwest says the system permits quicker boarding, cutting gate time for its jets.

Some travelers won't fly the airline because it doesn't assign seats, although about 75 percent prefer the open seating, Kelly said.

"I understand Southwest's concern in terms of losing their quick turnarounds," Stempler said. "If they could figure out a way to do it quickly, it would certainly be advantageous."

Southwest holds down training and spare-parts costs by using only one airplane type, Boeing Co. 737s, and keeps productivity high by reducing aircraft waiting time at airports. Lower costs allow it to profitably undercut major rivals' fares.

The airline said in October 2004 that ticketing-data technology it was developing might increase efficiency enough to allow seat assignments. Southwest has continued studying the issue, Kelly said.

Southwest in recent years also stopped issuing reusable plastic boarding passes in favor of disposable paper ones, began serving snack boxes on longer flights instead of only peanuts, and allowed online check-in and boarding passes instead of requiring them to be issued at airports.

The airline's shares fell 9 cents to $16.17 at 4:02 p.m. in New York Stock Exchange composite trading. The stock has fallen 1.6 percent this year.



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