The days are seemingly numbered for the concept of a low-cost airline. Spirit Airlines filed for bankruptcy twice last year and will restructure with just 80 planes. Southwest Airlines is headed in the other direction, joining the ranks of mainline carriers. Southwest CEO Bob Jordan hinted that changes are still in store for the airline, teasing lounges and first-class seats. Over the past year, the airline added bag fees and killed open seating. Jordan is gilding the lily at the Motel 6 of the skies.
Moving Southwest Airlines upmarket is clearly a move to increase revenue, but only time will tell if the carrier’s long-time passengers will stick around. Jordan emphasized that changes are intended to maintain its customer base at the Semafor World Economy Summit in Washington, D.C. on Monday. According to Flying, he said, “We’re going to keep making product changes, because we want to, over time, give you fewer and fewer and fewer reasons to have to go to a competitor.” He previously stated that Southwest was seriously considering adding first-class service.
How much can Southwest strip away of its decades-long identity before it becomes unrecognizable and just another airline? Jordan added that open seating was a significant factor in customers defecting to competitors. The CEO of McDonald’s could also argue that it is losing customers to other fast-food chains because its restaurants don’t serve meals in a bowl. However, it was already unlikely that fast casual eaters were ever going to stop at the Golden Arches.
Southwest is starting to build airport lounges
First class isn’t the only potential change coming to Southwest Airlines. The carrier is experimenting with lounge offerings for customers. Southwest is leasing airport terminal space in Austin, Texas and Honolulu, Hawaii. According to View From The Wing, the Austin-Bergstrom lease agreement details that the 40,000-square-foot space will be used as a crew lounge. However, the space is far too large for the number of employees Southwest will have based at the airport, suggesting it will actually serve passengers.
It’s a chaotic time in commercial aviation. Airlines are being impacted by the rising cost of fuel caused by the U.S.-Israeli war against Iran. However, demand for air travel is still higher. Passengers rushed to buy tickets in advance of potential price increases. Other airlines are taking more dramatic swings to increase profits. United Airlines CEO Scott Kirby pitched merging his carrier with American Airlines to President Donald Trump. While the acquisition would create the world’s largest airline and allow an American carrier to be competitive against foreign carriers, it would be the most significant threat to antitrust laws since AT&T.
