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Southwest Airlines is flying where it has never flown before: at night.

Southwest said Thursday that the airline plans to operate overnight flights for the first time in its history. It is joining other major US airlines that offer red-eye service on long eastbound routes.

The airline also said Thursday that it will begin assigning seats and adding extra-legroom premium seats to its cabins.

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The red-eye service will start from February 13, 2025, with five daily flights, the airline said. It then plans to roll out the rest of the year, with more routes launching in March and June. For now, the initial routes are:

• Las Vegas’ Harry Reid International Airport (LAS) to Baltimore/Washington International Thurgood Marshall 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

It was not immediately clear when the seating and cabin changes would take effect, though Southwest said it would share more details at its investor day in September. The airline said it expects to begin bookings sometime in 2025.

The move comes as Southwest confronts activist investor group Elliott Management, which recently announced it had amassed an 11% stake in the airline through publicly traded shares. The group has pushed Southwest to shed its top executives and make systematic changes to its business and operating model. The airline’s board said it continues to stick to its current strategy and has adopted a “poison pill” plan – commonly used by companies to resist hostile takeovers.

In an interview with TPG ahead of Thursday’s announcement, Southwest’s chief operating officer, Andrew Waterson, said the addition of overnight flights is more than just Elliott’s situation. Rather, the move is about improving the company’s overall operating efficiency as it waits for Boeing to fulfill seriously delayed aircraft orders.

“The world is short of aircraft, and we need to get more of ours [existing] aircraft,” Waterson said. “By doing this, we get more flight.”

Red-eye flights generally offer passengers more flexibility as well as slightly lower fares; You can enjoy your last full day in Las Vegas, go home overnight and get ready for work the next day (perhaps after a quick shower). They also offer airlines more productive use of expensive aircraft, improving their overall cost efficiency.

“[Revenue averages]From what we see from the industry, it’s a little bit below average,” Watterson said of the overnight flights. “But the aircraft is already paid for, so to speak.”

“And if you’re a little tight on aircraft, there’s a financial benefit to getting more flying out of the aircraft,” he added.

Southwest first hinted last fall that an overnight flight was in the pipeline, and it confirmed in March that service was coming soon. In the past, the airline was hampered by the limitations of technology, particularly its reservation system – airlines first started selling Overnight connecting itinerary last year

Provisions for overnight flights are already included in labor contracts with various labor groups, Waterson said, and were in earlier versions of collective bargaining agreements. The airline signed a new contract with flight attendants this spring.

In a way, the overnight flights represent a change for Southwest at a time when the airline may need it — even if not to the degree that Elliott would like.

Southwest’s share price has fallen steadily since the start of 2021, and its finances have struggled this year as pricing power and demand growth soften. It is also solely dependent on Boeing for new aircraft as it operates a single fleet type – the 737 family. Affects every plane-maker and component supplier in the aerospace supply chain; However, Boeing’s delivery rate has slowed as a result of production slowdowns while the manufacturer develops and implements new safety procedures.

That has severely restricted growth in the Southwest, driving the stock further down. Waterson said that by early 2024, the airline expects to take delivery of 88 new aircraft during the year. Now, he expects to receive only 20.

The airline’s board and executives support its low-cost, quick-turn business model and unique onboard experience (the airline does not assign seats and instead implements boarding groups that determine who can board early and choose their preferred seat. .) Nevertheless, they accept. That something needs to change, especially if the Southwest is to thrive in the current climate.

It includes an overnight flight.

“It’s definitely new, definitely different,” Waterson admitted. “You see the airline doing a lot of things that we haven’t done before.”

The airline is in the process of adding power ports for device charging to all its seats (something it had previously resisted), upgrading its Wi-Fi and redesigning its seats for the new aircraft.

“These are not new, huge steps, but it’s kind of a different situation, a change to a different zone than the Southwest was five years ago,” Waterson said.

Southwest has also changed its strategy around its day-to-day operations, approaching things like storms and other disruptions differently; It seeks to reduce delays and cancellations and prevent them from spiraling out of control during the 2022 holidays. TPG previously reported the changes Southwest is making to manage its operational disruptions and yield early, positive results.

“We’re running a high-quality operation, and I couldn’t be happier or prouder of our people,” Waterson said.

So far, the airline’s performance looks better than before the 2022 crisis. Delays and cancellations are widely rare, especially as a result of severe weather. While the airline was largely unaffected by the recent crowdstrike and Microsoft Windows outage, the ongoing meltdown at Delta Air Lines, once known for its reliability, underscores Southwest’s turnaround over the past 18 months.

“It’s been stressful and busy, and a lot of work,” but it’s paying off, Waterson said. “And the bottom line is we’ll never be done. Once you stop upgrading, it starts to get old.”

Waterson said the approach Southwest’s leadership is taking toward its product. While the airline is keen to maintain its unique culture and brand perception, its management team sees the pitfalls of falling behind. Therefore, he sees these changes as small but impressive upgrades and tweaks rather than a complete overhaul.

“Additional steps, always adding on,” is how Watterson described it. “After a while, the cumulative effect is like, ‘Oh, yeah, it’s different.'”

Of course, one of the most talked about changes at Southwest is the speculation surrounding the seat.

Prices are softening globally, but especially in the short-haul market specializing in the Southwest. Some airlines have found that premium products — such as first-class cabins, extra-legroom seats and premium economy seats — are enough to grow their finances. And help empower them. With only one class of service and no real add-on products to buy, Southwest misses out on the ancillary revenue that proves crucial at other airlines.

In customer surveys, Southwest said, about 80% of customers want open seating, which has been a hallmark of the airline since it began offering flights more than 50 years ago. It said it would share details about “product design, cabin layout, timing and incremental financial cost” at an investor day in September.

In some ways, a casual observer might think that Southwest’s delay in aircraft delivery was a blessing in disguise because adding more capacity would contribute more to the general oversupply of capacity in the US market. However, Waterson noted that’s not really how things work.

“We kind of built a company for a big airline,” he said. “You don’t want that shortage to come to you unexpectedly.”

With more warning and managed expectations, “we can tune the company for that,” he added. But when an airline’s plans for the year fall after certain expectations have been built in, “it’s disruptive.”

Ultimately, change is coming to Southwest, whether Elliott succeeds in assuming a controlling stake (or in convincing other shareholders to ascribe to his vision) or not.

For now, as widespread change comes slowly, change comes overnight.