Description

Southwest Airlines: What’s the Real Upside From Assigned Seating & Premium Seats—and How Big Could It Get?

Southwest Airlines reported its third quarter 2025 earnings, showcasing a blend of strategic initiatives and operational outcomes that delineated the company’s current market stance. The company demonstrated continued strong execution, driven by operational reliability, cost discipline, and key strategic initiatives contributing to its transformation plan. From a revenue perspective, Southwest Airlines achieved record third quarter revenue performance, helped by an improved demand environment which began in early July and sustained through the quarter. A notable enhancement was the introduction of assigned and extra legroom seating, which was initiated in July, showing a positive early impact with a 4-point improvement in customer Net Promoter Score. A key highlight was the company’s strong performance in costs management. The company surpassed its cost per available seat mile excluding fuel (CASM-X) projections substantially, reflecting stringent cost discipline across the organization.