Southwest Airlines' CEO told investors in a July 24 earnings call that the airline could eventually open its own lounges.

Southwest Airlines has announced a major change coming to its current seating system. The Texas-based airline previously had a “pick any seat” policy, allowing customers to purchase tickets in different boarding groups by selecting where they wanted to sit upon boarding the plane.

Just two months after ending its long-standing “Bags Fly Free” policy, the airline has announced when it will roll out assigned seating — a significant shift from its traditional boarding process. For decades, Southwest used a first-come, first-served system, along with free checked bags, that set it apart from its competitors.

Southwest stock dropped after it reported adjusted earnings of 43 cents a share on $7.2 billion in revenue, below Wall Street’s expectations.

Wall Street investors punished Southwest for chopping its 2025 profit outlook by up to 65%, as the carrier’s executives implement changes driven by its activist investor.

Earlier this year, Southwest Airlines announced several major policy changes in an attempt to boost the airline's slumping profits. This was highlighted by the decision to begin charging for checked bags,