Southwest to add cabin seats

By Mary Schlangenstein

Bloomberg News

DALLAS — Southwest Airlines will add six seats to most planes as part of a cabin refurbishing that will cut fuel use and boost revenue by at least $250 million a year at the biggest discount carrier.

The first change to aircraft interiors since 2001 will mean an investment of about $60 million, Chief Commercial Officer Bob Jordan said in an interview. A switch to lighter materials and seats will save about $10 million a year in fuel, he said.

Extra seats will increase revenue for Southwest, which eschews the fees for the first two checked bags that are now an industry standard. Chief Executive Officer Gary Kelly last month told employees the Dallas-based airline’s cost advantage had fallen by half over rivals like Delta Air Lines, and urged them to help hold down operating costs.

“We had a chance to add the seats without customers feeling less good than they do today,” Jordan said. “In a world where we have $100 fuel, we would have been crazy to look past at least studying the opportunity for more revenue.”

Southwest posted $12.5 billion in sales in the first nine months of 2011 and analysts estimate it will report $4.13 billion from the fourth quarter when earnings are announced on Thursday.

The modifications will bring total seats to 143 on Southwest’s Boeing Co. 737-700s. Boeing 737-800s, which will begin entering the airline’s fleet in March, will come with the new interior, as will 737 MAX aircraft slated to start arriving in 2017.

Room was created by switching to lighter, thinner padding; limiting the range of recline to two inches from three, and replacing seat-back pouches with netting. Pitch, or the distance from the back of a seat to the back of the one behind it, will slip to 32 inches from 33.

“How much legroom you have between you and the seat in front of you did not change,” Jordan said. “The smaller seat-back pocket, the change in the seat cushion that seats you lower and further back and a higher armrest worked to give you an equal or better experience than you have today.”

Pitch on Boeing 737-700s flown by Delta is 31 to 32 inches, and it’s 32 inches on Continental Airlines, part of United Continental Holdings, according to SeatGuru.com.

Southwest doesn’t anticipate any luggage logjams from having more seats without adding overhead bin space because the lack of fees means passengers don’t have an incentive to use carry-on bags, Jordan said. It also shouldn’t change Southwest’s average 30-minute “turn time,” or the length of time its planes spend on the ground between flights.

More durable seating material and different carpet that can be replaced in individual pieces also will reduce maintenance and other costs, Southwest said. The refurbishment includes environmentally friendly materials and different life-vest pouches that increase storage room under seats.

“We were able to move to better materials that are lighter, can hold up longer, can be recyclable and, at the end of the day, will burn less fuel because of less weight,” Jordan said.

Work on Southwest’s 372 Boeing 737-700s will start in March and be completed by mid-2013, Jordan said. The carrier then will redo 52 737-700s and 86 Boeing 717s acquired when Southwest bought AirTran.

Southwest hasn’t decided whether to refurbish its 737-300s and won’t rework the interiors of its 737-500s, which are being retired.