Southwest CEO floats first class, lounges and long-haul flights: 'We’re going to follow the consumer'

Could first-class, long-haul flights and airport lounges be next at Southwest Airlines? After all the changes to the airline's long-standing business model in recent months, including bag fees, assigned seats and bigloyalty program shake-ups, the company's top executives seemingly aren't ruling anything out.

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"We aren't stopping here," Southwest CEO Bob Jordan acknowledged, speaking Thursday at an industry conference in New York.

By next year, Jordan said, Southwest plans to unveil its next round of long-term plans — the next chapter, if you will, in the evolution that so far has ushered in assigned seats, $35 bags and, for the first time at the airline, basic economy.

What else could be on the horizon?

"There's no reveal today," Jordan cautioned. But he also posed some "hypothetical" examples of what the airline might consider.

"For many of our folks that love Southwest, we can't do things — we can't provide products — that you want. Like a first class. We can't get you to long-haul international destinations. If a lounge is important to you, we don't have a lounge," Jordan said while speaking at the Bernstein Strategic Decisions Conference.

"I'm not predicting any of those things," he reiterated while making clear that "we will continue to pursue the consumer."

And consumer demand for a lounge in some key Southwest cities, Jordan noted, is "super high."

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He also acknowledged that rethinking Southwest's international strategy (and pushing beyond its short-haul flights to places like Mexico and the Caribbean), "could require that you think about a different aircraft." The carrier currently has a fleet of entirely narrow-body Boeing 737s.

"What I'm promising you," Jordan said, "...is that we will never lack a 'where we head five years from now' strategy."

Evolving, but increasingly less different

Again, none of this is officially "on the table," so to speak.

But from bidding farewell to its hallmark Wanna Get Away fares (remember those commercials?) to upending its one-of-a-kind boarding process and launching red-eye flights earlier this year, recent months have shown a Southwest, which cut its teeth on being different, as an airline that's increasingly unafraid of change.

Financial pressures have a lot to do with it.

In the wake of the coronavirus pandemic, it's carriers like Delta Air Lines and United Airlines that have soared to the U.S. airline industry's highest profits, propelled by their robust international networks, premium seats and lucrative credit card portfolios.

Southwest, meanwhile, hasn't maintained its historically high margins — a driving force behind the shift the airline has gone through in recent months.

"The old model wasn't working and so now we've pivoted," Southwest Chief Operating Officer Andrew Watterson acknowledged on the company's earnings call last month.

Competing with premium airlines

Yet there's a stark reality in Southwest's pivot: Yes, it will soon have more premium options in its extra-legroom rows. Yes, it'll offer "upgrades" to A-List elite members and certain Rapid Rewards credit card holders.

But even as Southwest matches Delta, United, American Airlines and Alaska Airlines in charging customers add-on fees for bags (and eventually seats, on some fares), it still won't have the first-class seats and lounges those carriers offer. Even Frontier Airlines is adding bona fide premium seats, and JetBlue has announced lounges and a domestic first-class product to complement its long-haul Mint suites.

That contrast, as Brian Sumers of The Airline Observer wrote in March, arguably puts Southwest at a disadvantage as it begins to look more like its competitors in other areas.

And it's a contrast I posed to Tony Roach, executive vice president of customer and brand, during a recent interview just a few weeks ago.

"There's nothing to announce on lounges or first class," Roach cautioned then, with a similar tone to what Jordan offered during his remarks this week.

"But you can almost assume that, if this is a product offering that our customers ultimately are going to want and demand from Southwest Airlines, we've demonstrated that we've got to continue to evolve, serve more of those needs," he added. "We continue to look toward long term, the future of Southwest, which we, again, continue to offer more things that's going to give people more reason to choose Southwest."

Planning for the future

Whether customers would continue to choose a vastly different-looking Southwest was the subject of plenty of speculation this spring.

So far, so good, executives claimed last month, noting the carrier had not, as of yet, shed passengers to competitors.

"After announcing these changes, we saw no evidence of bookaway," Jordan told analysts in April.

But maintaining that momentum, he suggested this week, could require Southwest to continue evolving.

It's conceivable that quest could lead the airline to more of the features — and flights — that its competitors (and their customers) have flocked to in recent years.

"Because we can't offer certain products and get you to certain destinations, even customers that love Southwest, we force you to fly on somebody else. And we then force you to carry somebody else's cobrand [credit] card," Jordan said Thursday, committing to "study" that gap over the coming months.

"I would think about that," he added, "... as a 2026 question."

Related reading:

• Southwest Rapid Rewards: Guide to earning and redeeming points, elite status and more
• Best Southwest Airlines credit cards
• How to quickly earn the Southwest Companion Pass
• Southwest A-List status: What it is and how to earn it
• Maximize your airfare: The best credit cards for booking flights
• The best credit cards to reach elite status