Southwest Airlines will introduce a new premium credit card, tied to a new network of airport lounges that it’s building. CEO Bob Jordan explained this strategy during the airline’s second quarter earnings call on Thursday.
[W]e fully intend to continue to expand the co-brand offering and opportunities for our customers. I know I’ve teased the lounges. That’s something, obviously, that there’s work underway. We’re not ready to formally announce that yet. The whole purpose, again, is to expand co-brand opportunities, expand the card set, and provide to our customers something that they really, really want.
Southwest Airlines Boeing 737
Jordan highlighted enthusiasm for their Rapid Rewards frequent flyer program saying “new members are up 35%” but of course people aren’t joining to be loyal to Southwest or collect points, ‘joining’ now just means ‘registering to use free internet on the plane.’ However, he also reports that “card acquisitions [are] up 28%.”
This does not surprise me with recent aggressive with acquisition offers, but mostly because the card is far more useful than it used to be since it helps avoid all of the fees and barriers that the airline has thrown in front of customers – cardmembers can avoid seat fees and checked bag fees.
Southwest’s CEO has confirmed they’ve been signing leases for lounge space, even though they haven’t officially announced their lounge plans. They have at least 5 known lounges in their pipeline (Austin, Dallas, Nashville, Denver, and Honolulu).
Chase Sapphire Lounge, Philadephia
We know they’ve surveyed details on a card at the $395 – $650 price point that would include access to the airline’s lounges, as well as potentially a Priority Pass card (at least initially Southwest’s lounge access wouldn’t be very large).
Jordan keeps saying that “there’s work underway” on lounges but that they’re “not ready to formally announce that yet” because lounges tier up to the credit card and the premium credit card needs to be queued up too. The lounges aren’t going unannounced because there’s uncertainty about lounges. He even recently declared lounges the next highest priority after Starlink which they are already doing (and may be first to fully complete installations).
“Big, if true.”
WN has an enormous task repositioning itself as a legacy like carrier and even more becoming global but they have the pockets to make the transformation.
It won’t be fast but they are making slow but incremental progress.
@1990 – these are literally quotes from the CEO, they have the lounge spaces leased, and they’ve surveyed customers on the card
I would love to see lounges at BWI, MDW and MCO to make the premium card worth it. Living in the Northeast, the vast majority of my connections run through those airports.
@Gary Leff — Well, well, well… if His Excellency, Bob Jordan, himself, said it, then it must be… ‘Huge, if true.’ (Now, how’r those recliners lookin’, because jetBlue is actually installing those…Junior Mints!)
This is a yuge development!
“card acquisitions [are] up 28%.”
I bet A-list requalification is down by a similar fraction, as people realize that a $229 credit card provides most of the benefits of A-list at much lower cost. I have persuaded some family members to get the Priority credit card for this reason. I have also decided not to requalify for A-list, let alone A-list Preferred, for the same reason.
I still don’t understand the allure of lounges. They are always crowded and serve terrible food. Meanwhile, restaurants (and it’s much better!) are closer to the gate and you can get a seat. And when are airlines good at restaurants? Why not provide a voucher instead, where the customer can use anywhere, and make their own choice?
There is nothing that screams world class like Southwest customers all packed into a lounge
I’ll take the terminal thanks
I’m sure the dining will include peanuts and pretzels for those discerning pax
WN will surve tuna tartare and DOM.
Southwest has hubs in major markets and all the “2ndtier” cities that legacies abandoned. Rich people in Houston and Dallas love LUV and HOU, STL and KCMO they are the best option, same with Nashville, BWI, and the list goes on. Southwest has a big runway to get more $$$ from captive customers who want a better experience. My senior citizen mom will gladly fly then to LAX from STL if they have a comfortable option for a 4 hr Trip.
WHERE IS THE #@$%&! FIRST CLASS????
Lounges will create buzz, but I have trouble seeing them a reason to choose Southwest over its competitors. At least not after customers experience the typically mediocre lounge experience.
@nsx at FlyerTalk — How very ‘Immortan Joe’ of you… *walks into SW lounge* …”mediocre.” *floors it outta there* “Do not, my friends, become addicted to (no seat fees and two free checked bags). It will take hold of you, and you will resent its absence!” (@L737, there is a Mad Max reference for all occasions… ‘witness me!’)