Southwest breaks with 50-year tradition and will assign seats; profit falls at Southwest, American

Southwest Airlines plans to drop its tradition of more than 50 years and start assigning seats and selling premium seating for customers who want more legroom.

The airline said Thursday that it has been studying seating options and is making the changes because passenger preferences have shifted. The moves could also generate revenue and boost financial performance.

Southwest made the announcement on the same day that both it and American Airlines reported a steep drop in second-quarter profit despite higher revenue.

Airlines are struggling with higher costs and reduced pricing power, especially on flights within the United States, as the industry adds flights faster than the growth in travel demand.

Southwest, based in Dallas, said its second-quarter profit fell 46% from a year earlier, to $367 million, as higher costs for labor, fuel and other expenses outstripped an increase in revenue. The results met Wall Street expectations.

American Airlines also reported a 46% drop in profit, to $717 million, and said it would break even in the third quarter — well below Wall Street expectations for the July-through-September period.

American “did not perform to our initial expectations” because of a since-abandoned sales strategy and an oversupply of domestic flights, CEO Robert Isom said. He said the airline was responding with a strategy that boosts profits and “makes it easy for customers to do business with American.”