Flying Southwest From Missouri Could Become More Of A Challenge

Southwest Airlines has beaten legacy airlines for decades by being quirky and different, offering flyer-friendly amenities like free checked bags and giving customers a hassle-free experience. While the free checked bags probably aren't going anywhere, the quirky, different airline, bluntly, may soon be as big a pain in the butt to fly as any of the legacy airlines.

Late last month, Southwest Airlines announced dismal earnings projections, saying it would greatly miss its previous guidance for the second quarter. They projected a 3.5% drop, but now the company says earnings will be down 4% to 4.5%. That's not sitting very well with Elliott Capital Management, who has a nearly $2 billion stake in the company, according to View From The Wing.

To prevent Elliott Capital Management from gaining control, the airline adopted a poison pill that dilutes any entity whose stake hits 12.5% without the board's approval. According to View From The Wing, Elliott doesn't so much want to buy the airline as control it and change it, and they're planning a proxy fight to get shareholders to vote for their board candidates.

The truth is that Southwest Airlines has changed over the last decade or so. Maybe it's better for those who fly regularly for business. Yet, for the average Joe just trying to go on vacation, it seems there's more hassle flying Southwest than there used to be. At least, that's my perception from my occasional trips.

If Elliott Capital takes over, you won't have to jockey to get a good boarding position. You'll probably have assigned seats, and yes, just like the legacy carriers have done, if you want a better seat, you'll have to pay more for it. I'd also expect more nickel and diming.

View From The Wing says changes are coming anyway. They expect the airline to announce significant changes at their investor day in a few months. These changes may include assigned seating, premium extra legroom seats, and basic economy replacing the airline's Wanna Get Away fares.

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View From the Wing believes that Southwest Airlines needs to change. However, they question whether Elliott Capital, besides pointing out that perhaps the airline needs to change, actually has a viable plan to do that. They also strongly believe that turning Southwest Airlines into a copycat of other airlines isn't the right path.

I don't think it is either. It is debatable whether Southwest can rejigger its cabins to offer flyers who want to pay a more premium experience, provide value flyers with the great deals they do without making them feel like cattle, and still be the quirky, hassle-free airline people love. It'll be interesting to see how it all plays out.

As I said, flying Southwest Airlines may be more challenging than it is today by the end of the year. I mean everything from booking, checking in, boarding, and the perceived value of buying a ticket to fly on Southwest.

That stinks and is just one more reason to avoid flying whenever possible.