Southwest Airlines Outlines Two Billion-Dollar Plan To Transform The Customer Experience, Bringing More Simplicity And Speed From The Ground Up: Airline To Connect Customers With Faster Wifi, New In-Seat Power, Larger Overhead Bins, And More
DALLAS — Southwest Airlines Co. (NYSE: LUV), today awarded the 2022 J.D. Power Award for Highest Customer Satisfaction among Economy carriers in North America, announces next steps in its plan to bring the next generation of Customer Experience in travel with Southwest Airlines®, through more than two billion dollars in planned investments. These initiatives are designed to enhance and simplify Customers' journeys—from booking trips, to traveling through airports, and while inflight—delivering an even more enjoyable, efficient, and productive Customer Experience.
On the ongoing journey to modernize the Customer Experience, Southwest revealed commitments to:
- Bring enhanced WiFi connectivity onboard aircraft;
- Install latest-technology onboard power ports to charge personal devices at every seat;
- Offer larger overhead bins with more space and easier access to carryon items;
- Launch a new fare category with added flexibility and value, Wanna Get Away PlusTM;
- Introduce more entertainment options and a wider selection of refreshments in the cabin; and,
- Enable new self-service capabilities to bring elevated ease in doing business with Southwest, benefiting Employees and Customers.
Learn more at Southwest.com/experience.
"You can never stop working to get better, and as our beloved Founder Herb famously said, ‘If you rest on your laurels, you'll get a thorn in your butt!' We have a long and proud history of offering Legendary Customer Service and warm Hospitality, and we have bold plans and significant investments to modernize and enhance the Southwest Experience," said Bob Jordan, Chief Executive Officer. "As we continue to welcome back loyal Customers and win new ones, these initiatives, combined with the best People in the industry, support our Purpose of connecting People to what's most important in their lives through friendly, reliable, and low-cost air travel."
Commitment to Connectivity
"Top of our list is giving our Customers reliable connections in the air to those things that are important and accessible to them on the ground," said Ryan Green, Senior Vice President and Chief Marketing Officer. "We're investing in our onboard connectivity and bandwidth available to each Customer with upgraded technology that's now installing across our existing fleet, a strategy to diversify our WiFi vendors on upcoming aircraft deliveries, and plugging Southwest Customers into in-seat power to keep them charged while in the air."
- Southwest is upgrading WiFi equipment on its existing fleet with longstanding connectivity provider Anuvu's latest-generation hardware capable of providing a significant improvement in speed and bandwidth up to 10 times the current hardware onboard.
- Plans are for the Anuvu latest-generation hardware to be onboard 50 in-service aircraft by the end of May, with a projected 350 aircraft upgraded by the end of October.
- Testing the upgraded WiFi equipment is now underway on some routes over the western mainland U.S. As part of the test, Southwest is offering free WiFi to all Customers on select flights to understand how the upgraded equipment performs with a large number of Customers using the equipment simultaneously.
- Alongside its relationship with legacy connectivity provider Anuvu, Southwest recently entered into an agreement with industry-leading satellite connectivity provider Viasat to provide high quality internet and live television programming onboard newly delivered aircraft beginning in the fall of this year.
Southwest pioneered gate-to-gate connectivity in 2010, becoming the first major airline in the United States to offer satellite-based connectivity on domestic flights. The first generation technology brought free live TV, streamed on individual devices. The airline continues to heavily invest in its WiFi product aimed to meet Customers' connectivity expectations.
Leaping to the Latest In-Seat Power
Southwest plans to install latest-generation onboard USB A and USB C power ports on every seat in the aircraft, with a space-saving system that will not compromise legroom. The airline plans to bring this new convenience and capability onboard 737 MAX aircraft beginning in early 2023.
"The ability to keep your devices charged while you are connected inflight is a request that we've heard consistently in ongoing conversations with our Customers," said Tony Roach, Vice President of Customer Experience and Customer Relations. "With so much that our Customers love about doing business with Southwest, we're constantly listening to our Employees and our Customers for improvement opportunities, and we're excited to share some additional news and updates on this ongoing work."
- Bin here, bin there: Alongside its famous "Bags Fly Free" promise that provides every Customer onboard a Southwest flight the option to check two bags for free (weight and size limitations apply), the carrier is making room in the cabin for carryon items with larger overhead bins that also bring easier access to store and retrieve luggage onboard. The larger overhead bins will be on aircraft deliveries beginning early next year.
- Online, not in line: New functionality for the carrier's digital platforms and airport kiosks give Customers the ability to handle common requests and help them move more efficiently from curb to gate. By late summer 2022, Customers will be able to purchase Upgraded Boarding A1-A15 positions (when available) on their mobile devices without standing in line at the airport. Also on the horizon, an ability to add lap child travelers when booking online, and the airline recently added lap child check-in at self-service kiosks. Introducing more self-service options builds on the carrier's effort to reduce wait times with improved and simplified online change functionality; recent improvements have reduced the need for Customers to call to make flight changes, and subsequently reduced hold times to allow Southwest Representatives more availability for specialized Hospitality and Customer Service.
- More flexibility takes flight: The carrier's previously announced additional fare, Wanna Get Away PlusTM, is expected to become available to Customers later this month, bringing a new ability to transfer travel funds1 and to confirm a same-day change2 to an available seat on a different flight between the same origin and destination, without a change in base fare. Southwest also offers a wide variety of accepted payment methods, and provides My Account information in mobile friendly views across the carrier's digital platforms.
- Mixing it up: Adding to an expansive beverage selection featuring a number of alcohol options, additional refreshment offerings will begin this summer with a Bloody Mary Mix, followed by a ready-to-drink cocktail in September, alongside new options of Hard Seltzer, and Rosé.3 Southwest also will enhance its inflight entertainment portal to more than double the number of free movies currently available by end of year and coming late May will update the flight tracker to provide 3-D views that offer aircraft information and customized destination guides based on your flight itinerary.
"We listen to our Customers, and their insights help us deliver on and exceed their expectations," Jordan said. "Behind these commitments stand the legendary People of Southwest Airlines—ready to welcome Customers onboard with warmth, Hospitality, and LUV."
The aforementioned investments were included in the Company's five-year annual targets through 2026 for operating costs and capital spending provided at its Investor Day in December 2021—annual inflation in operating expenses per available seat mile (CASM, or unit costs), excluding fuel, profitsharing, and special items, in the low single digits range, and average annual capital spending of approximately $3.5 billion—and do not change guidance provided in the Company's first quarter 2022 financial release.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Specific forward-looking statements include, without limitation, statements related to (i) the Company's expectations with respect to enhanced WiFi and other Customer Experience enhancement initiatives; (ii) the Company's expectations regarding expenditures in connection with Customer Experience enhancement initiatives; (iii) the Company's expectations with respect to its new fare category Wanna Get Away PlusTM; (iv) the Company's plans and expectations with respect to winning new Customers; (v) the Company's fleet plans with respect to updated WiFi, power ports, and bin space; (vi) the Company's expectations regarding Customer self-service capabilities and associated productivity benefits for Company Employees; (vii) the Company's expectations regarding its onboard menu and entertainment options; (viii) the Company's financial and operational outlook, expectations, and projected results of operations, including factors and assumptions underlying the Company's expectations and projections; and (ix) the Company's plans and expectations related to capital spending. These forward-looking statements are based on the Company's current estimates, intentions, beliefs, expectations, goals, strategies, and projections for the future and are not guarantees of future performance. Forward-looking statements involve risks, uncertainties, assumptions, and other factors that are difficult to predict and that could cause actual results to vary materially from those expressed in or indicated by them. Factors include, among others, (i) the Company's dependence on third parties with respect to the Company's initiatives, strategies, expectations, and goals, and the impact on the Company's operations and results of operations of any third party delays or non-performance; (ii) any negative developments related to the COVID-19 pandemic, including, for example, with respect to the duration, spread, severity, or any recurrence of the COVID-19 pandemic or any new variant strains of the underlying virus; the effectiveness, availability, and usage of COVID-19 vaccines; the impact of government mandates, directives, orders, regulations, and other governmental actions related to COVID-19 on the Company's business plans and its ability to retain key Employees; and the extent of the impact of COVID-19 on overall demand for air travel and the Company's related business plans and decisions; (iii) the Company's dependence on its workforce, including its ability to employ sufficient numbers of qualified Employees to effectively and efficiently maintain its operations; (iv) the impact of fears or actual outbreaks of other diseases, extreme or severe weather and natural disasters, actions of competitors, fuel prices, consumer perception, economic conditions, fears of terrorism or war, socio-demographic trends, and other factors beyond the Company's control, on consumer behavior and the Company's results of operations and business decisions, plans, strategies, and results; (v) the Company's ability to timely and effectively implement, transition, and maintain the necessary information technology systems and infrastructure to support its operations and initiatives; (vi) the impact of governmental regulations and other governmental actions on the Company's business plans and operations; and (vii) other factors, as described in the Company's filings with the Securities and Exchange Commission, including the detailed factors discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021.
1 Transferable Flight Credit:
Transferable flight credit allows you to transfer your flight credit to someone else. Both must be Rapid Rewards® Members and only one transfer is permitted. The expiration date is 12 months from the date the ticket was booked. For bookings made through a Southwest® Business channel, there is a limitation to transfer only between employees within the organization.
2 Same-Day Change/Same-Day Standby
If there's an open seat on a different flight that departs on the same calendar day as your original flight and it's between the same cities, you can get a seat on the new flight free of airline charges. If there isn't an open seat on this different flight, you can ask a Southwest Gate Agent to add you to the same-day standby list for a flight between the same city pairs that departs on the same calendar day prior to your originally scheduled flight, and you will receive a message if you are cleared on the flight. For both the same-day change and same-day standby benefits, you must change your flight or request to be added to the same-day standby list at least 10 minutes prior to the scheduled departure of your original flight or the no-show policy will apply. Based on the flight status contact preference selected during booking, the message regarding your standby status will be an email or text message with a link to access the boarding pass via the Southwest app, mobile web, or you can visit a Southwest Gate Agent to print off the boarding pass. If there are any government taxes and fees associated with these itinerary changes, you will be required to pay those. Your original boarding position is not guaranteed.
3 Food and Beverage
On flights less than 175 miles, food and beverage service will be limited to water only. Customer must be 21 or older to consume alcoholic beverages.
ABOUT SOUTHWEST AIRLINES CO.
Southwest Airlines Co. operates one of the world's most admired and awarded airlines, offering its one-of-a-kind value and Hospitality at 121 airports across 11 countries. More than 50 years after its first flight in 1971, Southwest continues to democratize the sky through friendly, reliable, and low-cost air travel and now carries more air travelers flying nonstop within the United States than any other airline4. Based in Dallas and famous for an Employee-first corporate Culture, Southwest maintains an unprecedented record of no involuntary furloughs or layoffs in its history. By empowering its nearly 59,0005 People to deliver unparalleled Hospitality, the maverick airline cherishes a passionate loyalty among as many as 130 million Customers carried a year. That formula for success brought industry-leading prosperity and 47 consecutive years6 of profitability for Southwest Shareholders (NYSE: LUV). Southwest continues to develop tangible steps toward an environmental sustainability goal of achieving carbon neutrality by 2050, including offering an opportunity for Customers to contribute toward helping Southwest offset its carbon emissions. For more information, please visit Southwest.com/wannaoffsetcarbon. Learn more at Southwest.com/citizenship about how Southwest Airlines leverages a unique legacy and mission to serve communities around the world.
4. U.S. Dept. of Transportation most recent reporting of domestic originating passengers boarded
5. fulltime-equivalent active Employees
6. 1973-2019 annual profitability
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