Southwest Airlines is ending open seating and will introduce extra legroom seats in a major shift aimed at increasing revenue. The airline plans to sell flights with extra legroom starting next year and will also begin offering overnight flights in February.

For years, Southwest executives have considered these changes, hinting in April that the airline was seriously looking into assigning seats and offering pricier seats with more legroom. Currently, customers are placed in one of three boarding groups and must check in early to secure a good seat, unless they pay for a higher-priced ticket for earlier boarding.

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The decision was announced by Southwest Airlines CEO, Bob Jordan.

Research showed that Southwest’s open seating model was a major reason travelers chose competitors, with 80% of Southwest’s customers preferring assigned seats. “Our thoughtful and extensive research makes it clear this is the right choice,” said CEO Bob Jordan.

The airline will maintain its two free checked bags policy. However, under pressure to adapt, especially after activist investor Elliott Investment Management disclosed a nearly $2 billion stake in the company, Southwest is making these changes to better compete.

Southwest expects about a third of its Boeing 737 seats to offer “extended legroom,” subject to FAA approval. The carrier has traditionally relied on a simple business model, which Jordan noted was easier to manage when planes were less full.

Analysts have criticized Southwest for being slow to adapt, as rivals have long offered options like extra legroom seats and premium classes. Southwest will provide more details on these changes at an investor day in September.