Southwest Airlines says it will no longer offer open seating

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and why Southwest Airlines is making big changes.

Transcript

00:00I'm Conway Gittins reporting from the New York Stock Exchange. Here's what we're watching on the street today. An economic surprise on Thursday

00:06could offset earnings angst one day after the biggest stock market sell-off in a year and a half. The U.S. economy

00:13expanded at a 2.8 percent annual rate during the second quarter

00:17according to gross domestic product figures released by the Commerce Department.

00:21Economic growth showed a healthy uptick from the 1.4 percent rate seen the prior quarter.

00:26Earnings season, however, remains a concern for Wall Street.

00:30There was a huge earnings miss at Ford and profits at American Airlines slumped 46 percent.

00:37Sticking with airlines for the first time in its 50-year history,

00:42Southwest Airlines is ditching open seating. The airline says,

00:46quote, the research is clear and indicates that 80 percent of Southwest customers and

00:5286 percent of potential customers prefer an assigned seat.

00:56When a customer elects to stop flying with Southwest and chooses a competitor,

01:00open seating is cited as the number one reason for the change.

01:05Southwest is also shaking up the passenger experience in other ways.

01:08It is redesigning the inside of the plane to create premium seating with more legroom,

01:13which of course means higher ticket prices. In addition, it will start flying red-eye overnight flights for the first time as well.

01:20The changes come amid

01:22intense competition across the airline industry with a glut of airline seats chasing increased demand. In its latest quarter,

01:30Southwest posted a 51 percent drop in profit.

01:34That'll do it for your daily briefing from the New York Stock Exchange. I'm Conway Gittins with The Street.

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