{"id":265517,"date":"2025-05-31T15:14:22","date_gmt":"2025-05-31T15:14:22","guid":{"rendered":"https:\/\/peraltafinancing.com\/airline\/southwest-floats-first-class-lounges-long-haul-flying-good-strategy\/"},"modified":"2025-05-31T15:14:22","modified_gmt":"2025-05-31T15:14:22","slug":"southwest-floats-first-class-lounges-long-haul-flying-good-strategy","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=265517","title":{"rendered":"Southwest Floats First Class, Lounges, Long Haul Flying: Good Strategy?"},"content":{"rendered":"


\n<\/p>\n

\n

In recent times, we\u2019ve seen Southwest massively evolve its business models, in ways that would\u2019ve seemed unthinkable several years ago. The airline has started charging for checked bags<\/a>, has introduced basic economy<\/a>, and is introducing assigned and extra legroom seating<\/a>.<\/p>\n

What\u2019s next for the airline? Well, it sounds like what we\u2019ve seen so far might only be the beginning.<\/p>\n

Southwest \u201cwill continue to pursue the consumer\u201d<\/h2>\n

Sean Cudahy<\/a> reports on a talk that Southwest CEO Bob Jordan gave at the Bernstein Strategic Decisions Conference on Thursday, May 29, 2025. Jordan said that \u201cwe aren\u2019t stopping here,\u201d and stated that by 2026, the airline will unveil its next round of long term plans, to continue evolving the business model.<\/p>\n

Jordan gave some \u201chypothetical\u201d examples of what the airline might consider:<\/p>\n

\n

\u201cFor many of our folks that love Southwest, we can\u2019t do things, we can\u2019t provide products, that you want. Like a first class. We can\u2019t get you to long haul international destinations. If a lounge is important to you, we don\u2019t have a lounge. I\u2019m not predicting any of those things, but we will continue to pursue the consumer.\u201d<\/p>\n<\/blockquote>\n

Jordan also reportedly noted that consumer interest in lounges is \u201csuper high,\u201d and that the evolution in passenger demand \u201ccould require that you think about a different aircraft.\u201d<\/p>\n

As you can see, Jordan isn\u2019t actually promising anything specific here. However, if the claim is that they\u2019re going to \u201ccontinue to pursue the consumer,\u201d then there\u2019s no denying that consumers want first class, lounges, and long haul flying. That of course assumes that you don\u2019t think that current consumer trends are some fad that will be changing soon.<\/p>\n

<\/p>\n

\"\"
Southwest\u2019s changes are just getting started<\/figcaption><\/figure>\n

The more Southwest evolves, the less differentiated it is<\/h2>\n

Watching Southwest\u2019s evolution is absolutely fascinating. I\u2019d argue that for all too long, Southwest didn\u2019t evolve at all, when it probably should have. The airline just continued doing exactly the same thing for so long, without keeping an eye on the competition.<\/p>\n

But now Southwest is going to the opposite extreme. The airline is eliminating virtually everything that makes it unique, and is just following the competition. It\u2019s anyone\u2019s guess how this all plays out. To Southwest\u2019s credit, the airline has a massive route network, and scale is more important in the airline industry than ever before.<\/p>\n

At the same time, as the airline increasingly simply follows the competition, it loses all competitive advantages it had. Let\u2019s be clear, Southwest doesn\u2019t exactly have a low cost structure, as its employees are paid really well. If you start to eliminate the concept of customers choosing Southwest over competitors due to the differentiated experience, what does that really leave Southwest with?<\/p>\n

Like, if the airline starts to build a lounge network, it\u2019ll still only be a fraction of the size of what competitors offer. If the airline starts to offer first class, it\u2019s certainly way behind the competition. If the airline starts to operate long haul flights, it\u2019ll be way behind in getting slots and establishing partnerships, given the lucrative joint ventures that the \u201cbig three\u201d US carriers have. Never mind that Southwest\u2019s biggest hubs aren\u2019t necessarily great for these purposes, like Chicago Midway (MDW), Houston (HOU), etc.<\/p>\n

So I\u2019m not saying that any of these individual changes are bad, though I do think that when you add it all up and change everything, that combination is bad. After all, it leaves Southwest in a position where it essentially operates at a disadvantage compared to the legacy airlines, and I just don\u2019t see that as a winning strategy. Why would someone fly Southwest over Delta or United?<\/p>\n

It sure feels to me like Jordan is just a \u201cyes man\u201d for Elliott Investment Management. He\u2019s not leading the airline with any sort of a vision, other than agreeing to whatever changes need to be made for him to keep his job. At this point, I\u2019d say Southwest has about as much of a strategy as American\u2026<\/p>\n

\"\"
Southwest is changing too much, if you ask me<\/figcaption><\/figure>\n

Bottom line<\/h2>\n

Southwest\u2019s CEO has suggested that the airline \u201cwill continue to pursue the consumer,\u201d and \u201chypothetically,\u201d that could include things like first class, lounges, and long haul flying. Southwest has already changed everything that made it unique, and it sounds like the airline isn\u2019t stopping there. The goal seems to be to basically do everything the \u201cbig three\u201d are doing, but with significant disadvantages.<\/p>\n

What do you make of the way Southwest is evolving?<\/strong><\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":"

In recent times, we\u2019ve seen Southwest massively evolve its business models, in ways that would\u2019ve seemed unthinkable several years ago. The airline has started charging for checked bags, has introduced basic economy, and is introducing assigned and extra legroom seating. What\u2019s next for the airline? Well, it sounds like what we\u2019ve seen so far might […]<\/p>\n","protected":false},"author":1,"featured_media":265518,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12028],"tags":[6079,24123,1043,1416,2759,241,24633,13048,11636],"dealstore":[],"offerexpiration":[],"class_list":["post-265517","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-airline","tag-class","tag-floats","tag-flying","tag-good","tag-haul","tag-long","tag-lounges","tag-southwest","tag-strategy"],"yoast_head":"\nSouthwest Floats First Class, Lounges, Long Haul Flying: Good Strategy? - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=265517\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Southwest Floats First Class, Lounges, Long Haul Flying: Good Strategy? - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"In recent times, we\u2019ve seen Southwest massively evolve its business models, in ways that would\u2019ve seemed unthinkable several years ago. 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