Southwest Airlines News Release

Transcript of Gary Kelly's Remarks Regarding Southwest's New Boarding Method

September 19 - Dallas, TX

"Thank you, Ginger. And thank you all for joining us today. To assign or not to assign, that is the question.

As you know, the discussion of whether to keep our open seating or to assign seats has been the Southwest question for the past couple of years. Proponents of each method have been very vocal and heartfelt in support of their positions. My blog post of last summer alone generated more than 700 comments – and that doesn’t include the numerous Customer calls and letters we have received on this subject. Now that the Wright Amendment is on its way out, it seems as though open seating has been the topic of every cocktail party conversation that I have attended for the past year or so—at least until last week.

So, we are here today to answer that question. After much investigation, which included years of surveys, tests, evaluations, much deliberation, and as I mentioned earlier, hundreds of blogs and Customer letters, we are ready to close the book on “the great seating experiment” and announce our decision. Can I get a drum roll please… (cue a drum roll over sound system)

Our Customers have spoken! It is clear, they want the freedom to choose. They value Southwest’s efficiency. Customers want to be productive with their time. Southwest has decided to stay true to our core and celebrate our unique and legendary open seating policy that has served us so well over the course of our 36-year history. But wait, there’s more! Southwest is taking our current boarding method and improving it. Which means - no more “camping out” in line!

The new boarding complements our open seating and reduces the time our Customers spend in line. Our goal is to give our Customers back what they value most – time – and allow them to spend their preflight moments doing what they choose, whether it’s working, picking up a snack, making a phone call, catching up on the news, or just plain relaxing. That’s right; I’ll say it – no more cattle call!

So, how did we arrive at this point?

First, we tested the boarding times associated with assigning seats last year in San Diego. We tested approximately 200 flights using 3 different techniques. All were slower to board than our current open seating, which was exactly what our Employees and loyal Customers thought would happen. So, assigned seating failed on our objective to make Southwest, and therefore, our Customers, more productive.

Second, we surveyed thousands of flyers and Rapid Rewards Customers. We also solicited feedback from our San Diego test Customers. And, we received a tremendous amount of unsolicited feedback in the form of letters and on our blog.

Interestingly, in each case, the majority of respondents were either neutral or for retaining open seating. Our general market research revealed that assigned seating is not a big travel decision driver. Of course, the facts speak for themselves—Southwest, with open seating, carries more Passengers than any other airline in the world. Why? Because we offer great Customer Service from the friendliest Employees; with lots of flights; and with low, low fares. Conclusion?

Customers like choosing their seats—they don’t like standing in line.

So, our People set out last year to improve the boarding process with open seating. Several methods were tested last year in San Diego. We constructed the technology over the last year to support our new boarding method. And, we decided to conduct a full-scale evaluation in San Antonio – which began this summer. The responses we received were overwhelmingly favorable.

We asked our Customers:

• Was your wait in line reduced?
• Was the boarding process more fair?
• Are you more satisfied with gate experience?
• Are you more satisfied with overall boarding experience?

In fact, there are a few People here today that are very familiar with the energy we put into this decision. I would like to applaud, celebrate, and beg their families for forgiveness for all of their hard work and dedication in finding the perfect solution to our boarding puzzle. Bob Jordan, Teresa Laraba, John Zuzu, David Herrera, Susie Boersma, Tammy Hopper, Kelby Kirby, Paul Salas, and the rest of the San Antonio Test Team can you please stand up so we can give you a very small portion of the acknowledgement you deserve! I would like everyone to keep a mental picture of these faces and please direct all of the hard questions to them after today’s presentation.

The changes to our boarding procedure are easy to understand when observed but they can be difficult to explain. Let me give you a general overview. We will continue to place Customers into an A, B, or C boarding group based on the time of checkin. In addition to a letter, Customers now will be assigned a number within that group - for example: A32. This unique combination represents a reserved spot in the Customer’s boarding group – boarding groups are separated in groups of five. When a Customer’s boarding group is called, they simply find their assigned place in line and board the aircraft. The “A” group will queue first in two lines of A1-A30 on one side of marked columns and A31-A60 on the other side, followed by two groups of “B” and then the remaining “C”s.

To the extent possible, our gates will be modified with columns that reflect these new boarding groups, and our goal is to have the new boarding process up and running systemwide by early November 2007. We have put together a little video that shows the new boarding procedure in action at our San Antonio operation, which we would like to show you at this time. (video plays)

Pretty exciting stuff, huh? It’s simple! Kind of makes us wonder why we didn’t think of this years ago. Needless to say, we are very excited to continue giving our Customers the freedom to sit wherever they choose, and we are excited about the new boarding method that will give our Customers back the time they spent standing in line. I would be happy to answer any questions that you might have at this time."