Southwest Airlines, long famous for its no-frills, lounge-free image, is about to open its first-ever airport lounges. The first locations are set to debut next year at Austin, Baltimore, Nashville and Honolulu, with at least seven more cities to follow. There's no word yet on the full list, but the rollout marks one of the most surprising turns yet in the airline's dramatic reinvention.
The lounges come packaged with a new premium credit card developed with JPMorgan Chase, which will offer lounge access as a headline perk. Southwest's finance chief Tom Doxey described the move as a loyalty and brand play rather than a money-maker on its own — the idea is to pull in higher-income, 'top-of-wallet' customers who might otherwise default to Delta or United, and to give the airline's Rapid Rewards program a more aspirational feel.
None of this is happening in a vacuum. Over the past two years, Southwest has dismantled much of its old playbook under pressure from activist investor Elliott Investment Management: assigned seating is here, extra-legroom seats have been added, and checked bags are no longer free for most travellers. The results are showing up on the balance sheet. The changes from that overhaul are expected to contribute more than $1 billion in EBIT this year, and the airline posted a second-quarter adjusted operating margin of 6.7% — right in line with Delta and United.
There may be more to come. Southwest says it's actively weighing long-haul international flights and a dedicated premium cabin, moves that would have been unthinkable a few years ago. Corporate travel is already up 30% year over year, and management clearly sees lounges, premium seats and a better business-travel experience as the way to keep that momentum going.
For travellers, the practical takeaway depends on who you are. If you fly Southwest occasionally for cheap domestic hops, not much changes on your next trip — though the assigned seating and bag fees from earlier rounds of the overhaul certainly will have. If you're a frequent flyer or a points enthusiast, the new Chase-linked premium card could be worth watching when details drop. Co-branded cards with lounge access often launch with strong sign-up bonuses, and Southwest's program has historically been one of the easier points currencies to use, with no blackouts and redeemable points on any seat.
It's also a signal of where the airline is headed: expect a more upscale Southwest over the next couple of years, from the airport experience to possibly the seat itself. Anyone who wrote the carrier off as purely a leisure, drive-the-fare-down brand may want to take another look, especially for business travel within the US, where Southwest's domestic network remains one of the largest in the country. Keep an eye on announcements about which of the extra seven-plus lounge cities make the first wave — that list will tell you a lot about who Southwest is courting.