Southwest Airlines’ transformation could become even more radical, as its CEO eyes plenty of potential changes.
“Whatever customers need in 2025, 2030, we won’t take any of that off the table,” Bob Jordan told CNBC on Wednesday. “We’ll do it the Southwest way, but we’re not going to say ‘We would never do that.'”
He added that some people decide not to fly with Southwest because it doesn’t offer “things like lounges, like true premium, like flying long-haul international.”
The Dallas-based budget airline has started overhauling its business model in recent months.
Since the pandemic, passengers’ spending habits have changed as more are now willing to pay for premium options.
Coupled with increased fuel and labor costs, plus overcapacity in the domestic market, that spelled bad news for budget airlines’ bottom lines.
Southwest has also faced pressure from the activist investor Elliott Investment Management. The stock is up more than 10% over the past 12 months, but flat over the past five years.
Last July, the airline announced that it would end its signature open-seating policy — instead encouraging customers to pay to choose where they sit and for upgrades like extra legroom.
Ryanair, the European budget airline modeled on Southwest, introduced allocated seating more than a decade ago.
And last month, Southwest ended its trademark policy of “two bags fly free.” It now costs $35 for a first checked bag and $45 for a second one — although all loyalty members and credit card holders can get one for free.
It’s clear that Southwest is angling itself to encourage more loyalty and promote upgrades, but Jordan’s comments suggest it isn’t done just yet.
The airline serves a number of destinations in Mexico, Central America and the Caribbean. Last month, Southwest asked the Department of Transportation for permission to fly to any of the 100-plus countries with which the US has an Open Skies agreement.
In the filing, the airline said that being granted such permission would “promote competition and increase the traveling public’s ability to access Southwest’s high-quality, low-fare service.”
A Southwest spokesperson told Business Insider that the filing was “not necessarily indicative of anything forthcoming.”
On Wednesday, Jordan told CNBC: “No commitment, but you can certainly see a day when we are as Southwest Airlines serving long-haul destinations like Europe.”
“Obviously you would need a different aircraft to serve that mission, and we’re open to looking at what it would take to serve that mission.”
Southwest’s fleet comprises about 800 Boeing 737s.
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