Southwest Airlines is working on a new premium credit card at the $395 – $650 price point. It would include access to a network of Southwest Airlines lounges. They’re surveying some customers about a value propisition for this kind of card. (HT: @brabbworld)
Lanugage in the survey doesn’t suggest that the airline is ‘considering’ lounges or ‘could’ offer them. Instead, it directly states:
Southwest Airlines will be opening Premium Airport Lounges in multiple Southwest hubs.
Traditionally Southwest hasn’t called its major cities like Houston Hobby; Dallas Love Field; Chicago Midway; Denver or St. Louis ‘hubs’. Given the nomenclaure it’s possible that there’s imprecise language being used in the survey company, and though someone surely signed off on it we don’t know that ‘will’ is completely firm here.
Nonetheless it is clear that the case is being made for Southwest Airlines lounges to open up more premium credit card spend by customers and drive a piece of loyalty revenue that the airline has been missing. Like for JetBlue and Barclays, it seems likely that Chase would effectively cover the cost of these lounges.
Some of the benefits that survey recipients are asked to rank the importance of are:
- Southwest lounges with unlimited complimentary access for the primary cardmember with complimentary food and drinks, wifi, and power outlets
- Priority Pass select membership with unlimited access including one guest
- Global Entry or TSA PreCheck credit every four years
- Preferred Seat selection and Upgrade to Extra Legroom within 48 hours of departure
- Free roundtrip ticket up to $400 in value after $25,000 spend on the card each year
Other benefits are considered like a $100 travel credit or $100 Southwest flight credit; 8 confirmed extra legroom upgrades after $15,000 spend on the card each year; $200 CLEAR credit (perhaps it would end up as $209!); authorized user lounge, seating bag and boarding benefits @ $125 for authorized user card fees; automatic 2,500 elite points each year plus elite points for spend; $100 hotel or short-term rental credit; Chase The Edit benefits; Rideshare credit ($50 every 6 months); $50 quarterly dining credit; $10 per month wellness app credit; $150 Shops at Chase credit.
The exercise continues offering a variety of card value propositions and comparing them to existing products in the market – like the Delta SkyMiles Reserve card at $650 (where Southwest’s premium card would be $595) and in comparison to the United Club Card.
It’s interesting to see them test price points for a Southwest card ranging from the $395 Capital One Venture value level (and Venture doesn’t bundle coupon books like Amex and Chase) up through the $650ish airline premium cobrand price points, but not Sapphire Reserve or Amex Platinum prices.
- On the one hand I expect them to wind up in the $500 – $600 range, with Chase’s own offerings or partnerships bundled. That attracts the higher-end customer with higher spend levels, and further differentiates the card from Southwest’s current top card offering.
- On the other hand, Southwest’s customer base may not skew as high end as Delta’s, and any lounge network would start off more modestly. They need to offer Priority Pass for the sheer number of lounges, and so that the total lounges they market sounds as impressive as with other products – ‘the Southwest card gets you so many more lounges than the Delta or American cards do!’
Two years ago Southwest Airlines tested Priority Pass lounge access for cardmembers. That was before Elliott Management took over. They knew they were losing out on premium cardmember acquisition and spend because those customers wanted premium products and experiences that the airline simply did not offer.
Dallas Love Field is expanding the terminal and will include space to accommodate a Southwest Airlines lounge (though if they don’t take the space, others might).
Delta and Southwest Airlines have been jostling over becoming anchor tenants at the new concourse in Austin. Delta told employees they’d take over a bunch of current Southwest gates, with Southwest moving to the new concourse. That concourse has a large lounge space at the entrance.
Likely candidates for a Southwest lounge include places like Nashville as well. CEO Bob Jordan explicitly dropped the notion of a Nashville lounge back in June.
It’ll be interesting to see where they can find the space since existing airport space has been well picked-over not just by airlines but also now by three different bank lounge networks plus independent operators like The Club, Plaza Premium, and Primeclass.
I would have expected Southwest to actually need to open a lounge concomitantly with pulling the trigger on a lounge card, but JetBlue has been selling an expensive lounge card and their first lounge is not yet open. New York JFK is still expected this year and Boston next year.
I’m genuinely curious to see what Southwest Airlines lounges would look like – American, United, and Delta have all massively improved their products. With a clean sheet, and Chase backing, would Southwest’s be at the same level, something closer to Chase’s own lounges, or an offering closer to the airline’s no-frills roots?
For decades Southwest Airlines served peanuts on board because Herb Kelleher was so focused on costs – famously shooting down greater investment, “Do you know what the difference in cost is between peanuts and Snickers?”
Yeah but are the seats in the lounge first come first served or do you now have to pay to reserve them?
Unless you are a Dallas captive this has very little appeal or value to the rest of the country.
Well, well, well… where’s @Mike Hunt when you need him… sir, cheers to you, because this (along with an actual First Class) is what you were hoping for with SWA (becoming a ‘premium’ airline.) Time will tell if they actually do this, or it’s just more hype (you should know where my money’s at.)
@Peter — Zing! Got’em!
At some point if Southwest wants to be another US full service carrier it will need to have a true first class cabin. I think the airline would do ok with lounges. The US3 have certainly had no issues getting consumers to sign up for expensive ccs that give them lounge access, even those that may only fly 3-4 times a year.
@George Nathan Romey — So, you’re in the @Mike Hunt camp. More competition in the premium market segment is good for any of us who prefer to purchase First, because then there are more options, which usually drives down price for consumers. I just won’t believe it until I see it. I continue to doubt that Elliot (mis)Management, the activist minority shareholder, wants to see any further actual investment in these ‘nice’ things; rather, they’d just like to increase fees, offer nothing new. Once more, we shall see…
Your regular reminder that the very existence of Fancy Airport Lounges is an admission that we can’t (or won’t) design an airport to minimize the amount of time passengers need to spend in them.
@Denver Refugee — Then open your own airport, ‘with blackjack and hook…’ (@L737, I’m still getting through S13.)
“But Delta lounges are so much better than any Southwest lounge would be” – Tim Dunn, probably
One benefit about going “after” everyone else is being able to see what does and does not work. I’m all for it even if I won’t partake, but hope they can get it right.
PS (how about converting the banjo at DCA into a SW lounge instead of demolishing it?)
@1990 — Bah! And wow, good self control – I think you’ll feel rewarded at the end, the finale was one of my favorites of the season. [spoilers redacted]
@L737 — Great reference! The ceiling at DCA T1 reminds me of some of the ceilings in the Oculus in downtown NYC (similar ‘bone-like’ white columns, buttresses).
I assume no hope for a lounge at MDW?
I fully agree that moving forward without a genuine domestic first-class product, lounges are a complete waste of capital. The “big front seat” concept popularized by Spirit Airlines is no substitute for a true premium offering, and any attempt by Southwest to emulate that would fall flat. To compete meaningfully in the upmarket space, Southwest will have to undertake a costly and complex series of retrofits, involving structural modifications, new wiring, certification work, and redesigned service areas. Comparable cabin upgrades at other airlines have cost hundreds of millions of dollars. Beyond the engineering, a legitimate first-class experience requires enhanced catering, premium seating comfort, and a dedicated service model, all of which demand renegotiated labor contracts and higher operating expenses. The airline’s famously lean staffing and single-class service model will be fundamentally transformed, but they’ve got to do it. And very fast.
@ Gary –Can I cut the inevitable line with my fake disability and wheel chair? Can I bring my fake service animal, and can they sit at the table and dine with me?
Those with (fake) disabilities get free access to the lounges.
@Mike Hunt — I’ll admit, that was a far more nuanced take from you than I was expecting.
Oh I know what an airline with a self-inflicted critical wounds needs: lounges! This does absolutely nothing to help the product
They’ll probably be out of business before they can actually get the lounges up and running, so whatever.
Lounges would certainly be welcome at OAK (T2) BUR SAN LAS and other lovely WN airports in the West.
Chase et al need to stop with the stupid Priority Pass, GE, Clear etc. Many of us hold multiple cards so these superfluous benefits just lead to overcrowding at security and lounges. When everyone has priority then nobody has it.
The photo of the 8 SWA stewardesses…It was a Premium Product.
Not sure about some of the airline credits requiring a minimum spend considering the projected yearly fee.
Does it come with PP? Asking for 1990