Could Lounges Be Southwest’s Next Big Move to Woo Premium Flyers?

Southwest Airlines could introduce airport lounges, premium classes, and flights to Europe to woo big spenders, CEO Bob Jordan suggested, as the idiosyncratic company continues to rebrand.

“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,’” Jordan told CNBC at an airport industry conference last week.

From No-Frills to Premium Perks

Southwest has already shown a willingness to transform. Facing slumping profits and pressure from activist investors Elliott Asset Management, the Dallas-based airline has rethought some of the staples of its business over the last year.

Photo: Courtesy of Southwest Airlines

The airline is now charging for checked luggage, ditching a decades-long policy of allowing travelers to check two bags for free. Its open seating policy is slated to go as well. Starting later this year, Southwest travelers will be able to pay to secure assigned seats, including premium options with extra legroom.

The airline has also introduced bare-bones fare bundles with fees for extras, slashed point earnings on its cheapest fares, and culled its corporate workforce—the first layoffs in its 54-year history.

The Quiet Overhaul Already Underway

Southwest hasn’t seen its traditional budget-conscious travelers rebel over the bag fees and fare bundles it introduced this spring, Jordan said. And now the airline has its eye on new passengers with deeper pockets.

Photo: Southwest Airlines New Cabin Interior. Courtesy of Stephen Keller / Southwest Airlines

Luxury-seeking travelers have driven much of the growth in the aviation industry over the last five years, and airlines have increasingly catered to them with roomier premium seats, lavish airport lounges, flights to far-flung luxury destinations, and branded rewards credit cards.

Could Transatlantic Flights Be Next?

Southwest has already made a play for these travelers with new red-eye flights catering to flying execs, extra legroom seats, and its first international partnerships—with Icelandair and China Airlines.

Jordan suggested the carrier might go even further, including venturing to Europe.

Photo: Courtesy of Icelandair

“No commitment, but you can certainly see a day when we are as Southwest Airlines serving long-haul destinations like Europe,” he told CNBC.

Southwest, which has a stable exclusively of Boeing 737s, would have to acquire long-range aircraft for transatlantic flights, he acknowledged. But “we’re open to looking at what it would take to serve that mission.”

Is Nashville the First Domino to Fall?

Southwest could also open its first airport lounges. He identified Nashville as a market where Southwest passengers are looking for luxury. The airline has a greater than 50 percent market share at Nashville International Airport (BNA), and the metropolitan area has seen huge population growth—and exploding wealth.

Photo: Courtesy of David Syphers / Unsplash

“Nashville loves us, and we know we have Nashville customers that want lounges. They want first class. They want to get to Europe, and they’re going to Europe,” Jordan said.

Currently, those travelers have to book European vacations with Southwest’s full-service rivals, often sign up for their co-branded credit cards to reap the rewards, and then switch their allegiance.

“I want to send fewer and fewer customers to another airline,” Jordan said.