The Whited Curse strikes again — Southwest Airlines is considering scrapping its open-seating policy:
The airline is overhauling its computerized-reservation system to add the ability to assign seats and offer international flights. Officials say neither change is for sure.
The earliest Southwest could switch to assigned seating, used by every other major U.S. carrier, is 2008, Chief Executive Gary Kelly said Wednesday. The system won’t be able to handle the tax and customs information required for international travel until the following year, he said.
It would be a mistake to move away from open seating. As SciGuy has discussed, it’s faster and more efficient than assigned seating. One of Southwest’s major competitive advantages is its quick turnaround time. Planes don’t make money sitting on the ground, so Southwest keeps ‘em in the air. By shaving just a few minutes off each flight, you can accumulate enough saved time during the day to fly one more hop. The flipside is also true: waste an extra few minutes on the ground every flight, and you run out of daylight pretty soon.
To see, let’s crunch some numbers. Let’s say a Southwest plane’s workday is 12 hours; the first takeoff is at 8:00 a.m., and the plane has to be on the ground in its final destination city by 8:00 p.m. Let’s assume 1-hour flights with 20 minutes on the ground in between flights. For simplicity’s sake, all flights are within the same time zone.
The timetable looks like this:
- Flight 1: 8:00-9:00
- Flight 2: 9:20-10:20
- Flight 3: 10:40-11:40
- Flight 4: 12:00-1:00
- Flight 5: 1:20-2:20
- Flight 6: 2:40-3:40
- Flight 7: 4:00-5:00
- Flight 8: 5:20-6:20
- Flight 9: 6:40-7:40
That’s 9 flights a day. To make it easy, we’ll assume 100 passengers per flight, each paying $100. That’s 10 grand in revenue per flight. Fly this route every day for a year, and you pull in $32.85 million.
Now let’s say you introduce assigned seating, and let’s say it adds just 5 more minutes on the ground, per flight. Now your timetable looks like this:
- Flight 1: 8:00-9:00
- Flight 2: 9:25-10:25
- Flight 3: 10:50-11:50
- Flight 4: 12:15-1:15
- Flight 5: 1:40-2:40
- Flight 6: 3:05-4:05
- Flight 7: 4:30-5:30
- Flight 8: 5:55-6:55
Because of all the dilly-dallying on the ground, Flight 9 won’t get in before closing time, so it gets cut. Using the same assumptions as before, annual revenue just fell from $32.85 million to $29.2 million, a loss of $3.65 million or 11.1 percent. And that’s just on one route. Extrapolate that figure systemwide, and you’re talking some serious coin.
Of course, this idea makes sense if enough passengers are willing to pay a premium for assigned seating. It would have to be a pretty big premium, though — 11.1 percent just to break even. I don’t think many Southwest customers would pay it, given the choice. I sure as hell wouldn’t.
[Hat-tip: Laurence]
