Southwest Airlines turns less legroom into $773M

At least according to a website that figures the carrier added that much revenue from placing seats just an inch closer together.

By Jonathan Berr May 17, 2013 10:28AM
A Southwest Airlines jet takes off from Fort Lauderdale-Hollywood International Airport on February 21, 2013 (© Karen BLEIER/AFP/Getty Images)Southwest Airlines (LUV) has theoretically managed to squeeze more than $773 million in extra revenue from the flying public by squeezing them tighter into their seats.
 
As the website Unwieldy.net has noted, the airline decided last year to reduce its "seat pitch," better known as legroom, on its Boeing (BA) 737s by an inch, from 33 to 32 inches. By doing so, the fourth-largest U.S. airline was able to add six seats per flight. The Dallas carrier runs about 93,450 flights per month that are about 80% full, with an average ticket price of $141.72.

By Unwieldy's math, that equals exactly $773,074,040 in additional revenue, which for a company that's expected to generate $17.7 billion in sales this year isn't too shabby. A Southwest spokesperson couldn't be reached for comment on the validity of the site's calculation. However, aviation consultant Mike Boyd tells MSN Money that "it passes the smell test. . . . (But) you better have tushies in those chairs."

Less legroom is one of the many reasons flying has become a chore for many people. Airlines last year earned more than $6 billion in fees from checked bags and changed reservations, according to USA Today.

Southwest seems to be doing better than most airlines, though it still faces plenty of challenges. It recently reported better-than-expected quarterly earnings but warned that demand from passengers was softening.

However, as Consumerist notes, shrinking stuff can be very profitable for businesses: "Knocking a single ounce of orange juice from your large jug of OJ might not seem like much to you -- aside from the utter annoyance at paying the same rate for less product -- but it means an ocean of money to the producer."

Jonathan Berr doesn't own shares of the listed stocks. Follow him on Twitter @jdberr.

More on moneyNow


DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] S&P futures vs fair value: +5.70. Nasdaq futures vs fair value: +14.00. U.S. equity futures hover near their highs amid subdued action overseas. The S&P 500 futures trade six points above fair value. The benchmark index will enter the final session of the month with an August gain of 3.4%. Meanwhile, nine of ten economic sectors are on course to finish the month higher, while the smallest sector by weight-telecom services-will enter the session with an August decline ... More

MSN MONEY'S