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Southwest shelling out more than $2B on passenger experience

Southwest said the changes will raise costs per seat by a “low single digits" percentage.

DALLAS — Southwest Airlines will spend more than $2 billion to improve the flying experience for passengers, promising faster internet service, power outlets at every seat on new planes and larger overhead bins for carry-on bags.

The airline also said Wednesday that later this month it expects to roll out a previously announced fourth fare category, designed to fill a gap between Southwest's cheapest fares and its mid-priced ticket, which comes with perks like more frequent-flyer points.

Southwest has always offered fewer amenities than bigger rivals, right down to its lack of assigned seats and first-class cabins. The simpler approach helps Southwest keep costs down, but Wednesday's announcement indicates that it wants to remain competitive on passenger comforts.

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The airline said the cost of improvements was included in five-year spending targets that it disclosed in December. The improvements will raise costs per seat by a “low single digits" percentage, the Dallas carrier said.

Southwest said it is installing faster internet service on current planes under an agreement the aviation tech company Anuvu. Southwest has been testing the hardware on some flights and expects to install it on 350 planes, roughly half its fleet, by the end of October.

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The airline plans to install power outlets at every seat starting with new Boeing 737 Max jets that will be delivered early next year. The promised larger overhead bins will also wait until new planes start arriving.

Southwest said that by late this summer, improved technology will let passengers buy earlier boarding slots on their mobile devices without going to a gate agent.