Southwest Airlines says it is exploring adding “first class, airport lounges, and flights to Europe,” but in chasing everything, it risks becoming nothing to anyone. The era of being loved for simplicity and reliability may be slipping away under pressure from Wall Street and I just don’t see this ending well.
Southwest Chasing Premium Looks Like Desperation, Not Vision
CEO Bob Jordan has recently made some of the most radical statements in Southwest history: “We don’t have a true premium product… A first class. A business class.” He also said, “We are going to continue to pursue the customer and provide the things that they want.” Jordan also noted the airline is evaluating longhaul international flights and premium airport lounges in its turnaround plan.
Southwest To Add First Class, Widebody Planes, European Routes?
- Bob Jordan has said Southwest is exploring longhaul international flights and premium airport lounges as part of its strategic overhaul.
- He acknowledged that entering markets beyond what the 737 can serve will require different aircraft: “Should we choose to fly to Europe… that’s not a mission the 737 Max will do, so we need a different aircraft.”
- On CNBC, Jordan said, “Whatever customers need in 2025, 2030, we won’t take any of that off the table… We’ll do it the Southwest way, but we’re not going to say ‘We would never do that.’”
When “Everything Is On The Table” Becomes “Nothing Is Sacred”
Southwest once succeeded by offering a compelling product to its core demographic: low fares, two checked bags, no change fees, and a fun, reliable customer experience. That was their differentiation: simple, transparent, cheerful. That core business was profitable. It was a model that attracted loyalty because customers felt Southwest offered dependable, reliable value.
Now, with checked bags fees, assigned seating replacing open seating, and endless chatter of “premium” upgrades, the airline is stepping away from what made it beloved when it wasn’t even broken. It’s clear enough to say that when you try to copy airlines with more costly structures, you cannot help but spend more and that can create a further delta (if you’ll pardon the pun) between one of the elements that made passengers loyal in the first place when those higher costs are passed on. And without reliable product basics like fast Wi-Fi, power outlets, and comfortable seats, the “premium” rhetoric rings even more hollow.
Profitability comes from doing few things extremely well, not many things moderately poorly. We see this with JetBlue’s own struggles on transatlantic routes. Longhaul flights are expensive. Lounges cost real money. Premium cabins add weight, training costs, and complexity. If Southwest adds those without strong basics, they’ll bleed margin worse than they already are.
The new baggage fees may have generated $1.0 billion in new revenue, but if they cost $1.8 billion in revenue from customers booking away, the net result is very negative.
Path Back To Sustainability
The way forward isn’t first class lounges or copying legacy carriers. It’s nonstop and direct flights to key destinations, clarity in product offering, restoring perks that mattered (and the numbers in the months ahead will make clear what perks do matter to customers), and guaranteeing reliability. Southwest needs to commit to the things they actually still do well—friendly service, low-fare options, operational reliability—and stop diluting the brand. Easier said than done as business models and competition evolve, but this “throw everything against the wall and see what sticks” approach strikes me as destined to fail, and I hear the desperation even in the tone of CEO Bob Jordan, the puppet of Elliott Investment Management.
CONCLUSION
This shift toward “premium” feels less like evolution and more like identity surrender. Southwest should remember its roots: being indispensable for its customers by doing the basics right. Because if you’re nothing special anymore, you’re just another airline with higher costs.
As View From The Wing points out, “The problem is that this implies there’s no real opportunity to return to the kind of growth the airline saw in the past, and the kind of valuation multiples for their stock. There’s no great answer for Southwest, but their approach – to copy the business models of financial laggards JetBlue and American – isn’t promising.”
It seems to me growth should be focused on more planes and more routes, but not new plane types and longhaul routes that are already well-represented by competitors.
Finally starting to follow our example! Congrats, Southwest, and we hope to see greater competition with us soon! Maybe we can codeshare, too!
I agree with what you say – with the exception of assigned seating. I’d have thought that the marginal cost was negligible and do pax genuinely prefer a mad rush to bag a decent seat?
They need to offer these things to get a better deal from a credit card partner. That’s where the money is. Right now they don’t offer much thats attractive to add for benefits to a high annual fee CC. This would possibly change that
No doubt you are correct that is the target, but I think here could be more creative ways like the companion pass or “upgrade” to extra legroom seating, that could justify a higher annual fee without having to turn the business model upside down with first class or widebody jets.
But Chase told me that if I spend a measly $75,000 on the CSR I can get A-list status and a $500 credit with WN if I book through Chase Travel! But this article is suggesting that… gasp… Southwest might not be a premium airline! Are you telling me that the good people at Chase aligned the highest spenders of its most premium credit card with… a non-premium product? Heavens to Betsy, why on earth would they do that?!?
If the US3 make money by exploiting the transatlantic cartels, there’s nothing wrong with WN linking up with their current partners at Icelandair and/or the likes of LOT and competing against the JVs. I don’t know whether supply is being artificially constrained, but it certainly seems weird that major European conurbations such as NRW and Lyon have no transatlantic service other than the odd holiday flight to the Caribbean.
I think they should also add A350s and change the name of the airline to Northeast Airways.
So they want to be a low-rent version of AA?
Will Jesus Jetway & his 12 Disciples move to the front of the line of the Southwest Lounge.
Also, will three be “reserved seating?”
Need to have premium offerings to attract the premium flyers, the ones who make the airlines money.
An all economy model will not work these days
No reason they cannot restore things like free bags while also introducing a 12 seat F cabin. Maybe they’d market it as premium economy a la WestJet and could have an O-Y config for international flights
This is the way. Adding a 4th nationwide full-service carrier in the US would be a boon for consumers. And they already have hubs/focus cities in almost every major business market (only real major gap is NYC/the NE).
If they handle this right, they are a real threat to the Big 3.
maybe they want to copy Alaska, which is slightly more smiilng FA but that’s it.
The world, aviation, and travel is vastly different than it was even 10 years ago. Even Ol’ Herb, as brilliant as he was, would probably agree that the old WN is a dinosaur to the new climate and needs to drastically change.
They can pull this off. No doubt. But they can’t afford to go half way. I think adding F/J, expanding to overseas, and getting larger aircraft is absolutely necessary now. They made the first steps and there is no turning back at this point. I have mostly avoided them for years…but if you add these elements they have become far more attractive to me (as one example).
Or they could go full westjet and sell domestic f as o.
Ua and dl would have to follow suit
unpopular opinion.
I hope they go with a European Business class product. Skip the Capex angle of a first class installation and focus more on an incrementally better soft product (vs US3) for their domestic first class
That’s where they would excel, the soft product.
The sorts of passengers who buy premium fares in the US have almost certainly experienced EU short-haul business class. I don’t think I’ve ever seen a comment online that’s not “wow this is business class? What a rip off!”
Domestic premium passengers don’t care that much about the soft product, otherwise you’d have first class meals on more flights (and better food in general than the snack baskets). They care about the seat and having room to work/use their laptops.
Boring! Sadly becoming just another airline. Hope the best for the employees, but this is all VC driven to prep it for the sale.