Southwest Airlines Co.’s shares surged the most in almost four years on Thursday after the carrier unveiled a stock buyback plan and detailed major policy changes, part of a plan to revitalize its operations and fend off an activist investor.

The airline will begin selling assigned seats late next year and introduce a premium fare option offering extra leg room. The changes break from tenets that helped set Southwest apart for decades, after the carrier was slow to embrace the industry’s push to capture growing demand for premium flying options.

The carrier said it has no plans to introduce fees on checked luggage, sticking with the “bags fly free” policy that executives believe keeps customers loyal.

The disclosures were part of a wide-ranging investor update as Southwest also set a new $2.5 billion share repurchase program, raised its third-quarter sales forecast and said it added former airline executive Robert Fornaro to its board.

Southwest already announced a number of significant changes, including adding redeye flights and the move to assigned seats, ditching the free-for-all policy of more than 50 years.

U.S. economy grows at solid 3%

The American economy expanded at a healthy 3% annual pace from April through June, boosted by strong consumer spending and business investment, the government said Thursday, leaving its previous estimate unchanged.

The Commerce Department reported that the nation’s gross domestic product — the nation’s total output of goods and services — picked up sharply in the second quarter from the tepid 1.6% annual rate in the first three months of the year.

Consumer spending, the primary driver of the economy, grew last quarter at a 2.8% pace, down slightly from the 2.9% rate the government had previously estimated. Business investment was also solid: It increased at a vigorous 8.3% annual pace last quarter, led by a 9.8% rise in investment in equipment.

The third and final GDP estimate for the April-June quarter included figures showing that inflation continues to ease, to just above the Federal Reserve’s 2% target. The central bank’s favored inflation gauge — the personal consumption expenditures index, or PCE — rose at a 2.5% annual rate last quarter, down from 3.4% in the first quarter of the year. Excluding volatile food and energy prices, so-called core PCE inflation grew at a 2.8% pace, down from 3.7% from January through March.

Former FTX exec gets 2 years

Caroline Ellison, a former top executive in Sam Bankman-Fried’s fallen FTX cryptocurrency empire, was sentenced to two years in prison on Tuesday after she apologized repeatedly to everyone hurt by a fraud that stole billions of dollars from investors and customers of what once They seemed like a groundbreaking company in an emerging financial industry.

U.S. District Judge Lewis A. Kaplan said Ellison’s cooperation in the case was “very, very substantial” and praised her testimony, saying he saw no inconsistencies with documents shown to the jury or things she had previously told prosecutors.

But he said a prison sentence was necessary because she had participated in what might be the “greatest financial fraud ever perpetrated in this country and probably anywhere else” or at least close to it.

He said in such a serious case, he could not let cooperation be a get-out-of-jail-free card.

Feds sues Visa over market tactics

The U.S. Justice Department has filed an antitrust lawsuit against Visa, alleging that the financial services behemoth uses its size and dominance to stifle competition in the debit card market, costing consumers and businesses billions of dollars.

The complaint filed Tuesday says Visa penalizes merchants and banks who don’t use Visa’s own payment processing technology to process debit transactions, even though alternatives exist. Visa earns an incremental fee from every transaction processed on its network.

According to the DOJ’s complaint, 60% of debit transactions in the United States run on Visa’s debit network, allowing it to charge over $7 billion in fees each year for processing those transactions.

The DOJ said Visa also stifled competition by paying to enter into partnership agreements with potential competitors.

Compiled from Bloomberg and Associated Press reports.