Southwest's new premium seats come with a catch for everyone else

• Southwest Airlines introduces premium seating with extra legroom to boost revenue.
• Regular seats on about 450 planes will lose an inch of legroom, shrinking to 31 inches.

Southwest Airlines has an activist firm breathing down its back to cut costs and generate more revenue.

Among the airline's most notable new money-making strategies is premium seating. Southwest said Thursday that about a third of its planes will get extra-legroom seats that boast at least five inches of extra pitch.

To accommodate the added space, it will have to standardize legroom across its fleet to 31 inches. This means regular seats on about 450 planes, including its Boeing 737-800 and Boeing 737 Max 8 fleets, will lose an inch of legroom.

That is more than half of Southwest's fleet. Its smaller Boeing 737-700 fleet, which it has about 365 of, already has 31 inches.

Southwest said the new seating options, which go on sale next year for flights in 2026, would drive demand and extra revenue, noting that they could generate similar potential revenue with minimal seat loss compared to adding a business class or blocking a middle seat.

"On our larger aircraft, we didn't have to give up any seats," Southwest executive vice president for commercial transformation Ryan Green said during Thursday's Investor Day. "If you were to leave some of those rows of 32-inch-pitch and not add them as extended legroom and therefore the ability to monetize it, you'd just be leaving money on the table."

Southwest had to remove a row on its 737-700s to accommodate the new premium seats without reducing legroom to as low as 28 inches, as seen on ultra-low-cost competitors, Green said.

After the changes, Southwest said its Boeing 737-700 planes would have 40 extra legroom seats with 36 inches of pitch, while its Boeing 737-800 and Boeing 737 Max 8 with have 68 seats with 34 inches of pitch.

Its future 737 Max 7 will have 48 extra legroom seats, also with 34 inches. The plane is still uncertified, but Southwest has about 300 on firm order.

While Southwest's decision to lop off an inch of pitch from its regular economy class seats isn't ideal for consumers, it isn't as terrible as it may seem. In fact, Southwest would remain in line with or even ahead of its rivals.

Factoring in variations based on aircraft model and usage case, the single-aisle fleets at American, Delta, and United typically offer an average pitch of around 31 inches.

However, Southwest is even more competitive when you focus exclusively on the 737.

American's entire Boeing 737 fleet offers just 30 inches of pitch. The same goes for United's 737-700 and -800s. The Chicago-based carrier's larger Boeing 737-900 and Max 9s offer 30-31 inches of pitch.

Delta's 737s are a bit more generous in terms of space, with mostly 31-32 inches of pitch.

But Southwest has still lost its edge to industry leader JetBlue Airways, which continues to boast at least 32 inches of pitch across its entire fleet.