Southwest Airlines is flying somewhere it’s never flown before: at night.
Southwest says it plans to operate night flights for the first time in its history. It joins other major U.S. airlines in offering night service on longer routes east.
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The airline says the Red-eye service will start with five flights a day on February 13, 2025. It then plans to ramp up throughout the rest of the year, with more routes starting in March and June. Currently, the initial routes are:
- Las Vegas Harry Reid International Airport (LAS) to Baltimore/Washington Thurgood Marshall International Airport (BWI)
- LAS to Orlando International Airport (MCO)
- Los Angeles International Airport (LAX) to BWI
- LAX to Nashville International Airport (BNA)
- Phoenix Sky Harbor International Airport (PHX) to BWI
The move comes as Southwest battles with activist investor group Elliott Management, which recently disclosed that it has amassed an 11% stake in the airline through publicly traded shares. The group has pushed Southwest to fire top executives and make systematic changes to its business model and operations. The airline’s board of directors has said it will stick with its current strategy and has adopted a “poison pill” plan — a move often used by companies to fend off hostile takeovers.
In an interview with TPG ahead of Thursday’s announcement, Southwest CEO Andrew Watterson said the addition of overnight flights was not solely related to Elliott’s situation. Instead, the move was intended to improve the company’s overall operating efficiency while it waits for Boeing’s severely delayed aircraft orders to be fulfilled.
“The world is short of planes and we need to get more out of them. [existing] “This way we can fly more,” Watterson said.
Overnight flights often offer passengers a slightly lower fare in addition to more flexibility; you can spend your last day in Las Vegas having fun, fly home overnight, and get to work the next day (perhaps after a quick shower). They also give airlines the ability to use expensive aircraft more efficiently, improving their overall cost efficiency.
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“[Revenue averages]“What we see from the industry tends to be a little bit below average,” Watterson said of night flights. “But you could say the planes are paid for.”
“And if you’re a little tight on aircraft, operating more flights makes financial sense,” he added.
Southwest first hinted last fall that night flights were in the works, and It was confirmed in March. that the service will launch soon. Previously, the airline was hampered by technological limitations, especially its reservations system — the airline first started selling overnight connecting journey last year.
Overnight flight provisions have been included in labor contracts with various labor groups and were in previous versions of those collective bargaining agreements, Watterson said. The airline reached a deal with flight attendants on a new contract this spring.
In a way, the night flights represent a shift for Southwest at a time when the airline may need it — even if not to the extent Elliott would like.
Southwest’s stock has been on a steady decline since the start of 2021, and its finances have struggled as pricing power and demand growth have slowed this year. The airline is also completely dependent on Boeing for new aircraft, as it operates only one type of fleet — the 737. There are bottlenecks throughout the aerospace supply chain that affect every aircraft manufacturer and component supplier; however, Boeing’s delivery pace has slowed to a trickle after production slowed as the manufacturer developed and implemented a new safety protocol.
That severely limited Southwest’s growth, sending the stock further lower. By early 2024, the airline was expected to receive 88 new planes throughout the year, Watterson said. Now, it’s only expected to receive 20.
The airline’s board and executives support its low-cost business model, quick turnarounds, and unique in-flight experience (the airline doesn’t assign seats, instead using boarding groups to determine who can board early and choose their preferred seats). But they acknowledge that some things need to change, especially if Southwest wants to thrive in the current environment.
Including overnight flights.
“It’s definitely new, it’s definitely different,” Watterson admits. “You see the airline doing a lot of things that we haven’t done before.”
The airline is in the process of adding power outlets to all seats for charging devices (something it previously resisted), upgrading Wi-Fi, and redesigning seats to fit new aircraft.
“These aren’t big, groundbreaking steps, but they are a shift to a different kind of positioning, a different region than Southwest was five years ago,” Watterson said.
Southwest has also changed tactics around its day-to-day operations, approaching things like hurricanes and other disruptions differently; the airline is trying to minimize delays and cancellations and prevent them from spiraling out of control like they did during the 2022 holiday season. TPG previously reported on the changes Southwest is handling the disruption and seeing positive initial results.
“We are running a high-quality operation and I couldn’t be happier or more proud of our team,” said Watterson.
So far, the airline’s performance continues to look better than it did before the 2022 crisis. Delays and cancellations have dropped significantly, especially after severe weather. While the airline was largely unaffected by the recent CrowdStrike and Microsoft Windows incidents, The ongoing collapse at Delta Air Linesonce known for its reliability, has highlighted the contrast with Southwest over the past 18 months.
“It’s stressful and hectic, and a lot of work,” but it’s paying off, Watterson says. “And the thing is, we’re never done. Once you stop upgrading, it starts to age.”
That’s the approach Southwest’s leadership is taking with its product, Watterson says. While the airline wants to maintain its unique culture and brand perception, its management team sees the pitfalls of falling behind, so the airline views these changes as small, impactful tweaks and tweaks rather than a complete transformation.
Watterson describes it this way: “Incremental steps, always adding to it.” “After a while, the cumulative effect is like, ‘Oh, yeah, that’s different.’”
Of course, one of the most discussed changes at Southwest is the seating speculation.
Prices are falling globally, but especially in the short-haul market that Southwest specializes in. Some airlines have found that revenue from premium products—like first class, extra legroom, and premium economy—is enough to boost their finances and keep them afloat. With just one class of service and no real add-on products to buy, Southwest is missing out on the ancillary revenue that has proven so important for other airlines.
CEO Bob Jordan said on the airline’s first-quarter earnings call that the airline is considering various adjustments to its seating; however, he did not go into details. Jordan and other Southwest executives said the airline would share more at its investor conference in late September.
In some ways, a casual observer might think that Southwest’s delays in aircraft deliveries are a blessing in disguise, as the added capacity only adds to the overall overcapacity in the U.S. market. However, Watterson notes that this is not the case.
“We’ve built the company into a bigger airline,” he said. “You don’t want that shortage to happen unexpectedly.”
With more warning and managed expectations, “we can adjust the company accordingly,” he added. But when a shortage occurs after a certain expectation has been built into an airline’s plans for the year, “that’s disruptive.”
Ultimately, Southwest will change, regardless of whether Elliott succeeds in taking a controlling stake (or convincing other shareholders to buy into his vision).
Now, while the broader transition is slow, change is happening rapidly.
