Southwest CEO Bob Jordan talked everything from airport lounges, flights to Europe, using Rapid Rewards points to book on Air China and Iceland Air on Y’all-itics.
DALLAS — After six months of tumultuous change inside Dallas-based Southwest Airlines, from eliminating bag fees and open seating to talk of European flights and partnerships with other international carriers, CEO Bob Jordan promised the airline would keep evolving.
“We won’t stop here,” Jordan said on the Y’all-itics podcast. “We’re gonna keep changing. This is a point in the journey, it’s not the end point. So, if our customers are telling us they want something else, we’ll continue to look at.”
Over the last few months, the Dallas-based carrier enacted baggage fees, announced it will end open seating and begin offering a “premium seat class”, has just signed partnership agreements with Iceland Air and China Air, is considering airport lounges, and new international destinations in Europe, perhaps, might not be that far off.
“It’s really clear that our customers want changes,” Jordan said on Y’all-itics. “They want other options in the cabin. They want assigned seating. I mean 80% of our customers told us they want to assigned seating, 85% of customers that don’t fly us want assigned seating, and the number one reason people leave us or won’t book us is because of open seating. So, you can’t ignore what 80%, 85% of your customers are telling you.”
In the middle of the airline’s wholesale – and sometimes controversial – transformation as it pushes to become more profitable, Jordan sat down with the Jasons to discuss all aspects of it on Y’all-itics.
We recorded the segment in a studio just outside Jordan’s second-floor executive office at the airline’s Love Field headquarters in Dallas.
“We know there though there are folks that want a lounge or they want a business class offering or they want an airline that can take them on a long haul destination to Europe and we can’t serve those and so even if you love us we force you to another airline we force you to split your wallet we force you to hold somebody else’s co-brand card and we’re just not going to do that so we’re not going to be everything but we’re going to keep pursuing the customer,” Jordan said.
In May, Southwest Airlines applied for a permit from the U.S. Department of Transportation to expand to more international destinations.
“We are looking at how we expand the network. That could include one day long long-haul flying,” Jordan said. “Some of the top destinations that we can’t get you to are obviously London, the Paris’ of the world. Step one, you pursue partnerships. We’ve announced Iceland Air, Air China, and then we have others in the hopper that we’re not quite ready to announce today. You’ll see us continue to add partners. The obvious next question after partnerships is what flying would we want to do ourselves? So that would bring with it another aircraft type, the 737, except on a very small basis, can’t do that flying. It would have to bring with it other types of service. It would have to bring with it probably catering, so it’s not a non-complex question. It’s a big one.”
“It’d be logical to assume that I wouldn’t be speculating if these things were decades away,” Jordan said. “Part of what we’re doing is just ensuring that we always have a 5-year plan in place.”
After announcing the new partnerships with the international carriers, many Southwest passengers also immediately wondered if they could use their Rapid Rewards points to fly overseas on Iceland Air and China?
“Not yet,” Jordan said. “There are coming enhancements to allow you to book [Iceland Air and Air China flights] through Southwest.com and the app. And then the next enhancement would be you can use your Rapid Reward points, but you cannot do that today.”
Elliott Management, an activist investor, famously bought 11% of the airline’s stock last year, got three seats on the board, and pushed publicly for changes to increase Southwest’s profitability.
Gary Kelly, the chairman emeritus and former CEO, agreed to leave the board, and Jordan’s job was also reportedly on the line.
Now, as he guides the airline through the drastic changes, we asked Jordan whether he thinks his position is still in jeopardy.
“You got to back up and think about ‘what is the right thing for the company’, and not succumbing to maybe an easy answer,” Jordan told Y’all-itics, “For Bob, the answer was hold out to stay in control of what this place stands for.”
But bag fees, open boarding, and no-frills are what made the airline distinct for decades. Some loyal passengers now wonder what separates Southwest from the legacy carriers it fought so long to differentiate itself from.
“If you want bags fly free to continue to fly free, all you have to do is have the credit card in your wallet, period. And you, you, you still have free bags. All you have to do is, is fly us, you know, anybody with any level of status has free bags,” Jordan told WFAA.
He’s right. Same with American Airlines and other large legacy carriers. Passengers who have the airline’s credit card get perks like free bags.
But American and other airlines bit the bullet and enacted these fees 17 years ago. Southwest refused to – leaving billions of dollars on the table. That difference helped it attract and retain customers.
But should Jordan’s predecessors have enacted baggage fees and ended open seating years ago when the industry changed to avoid the pushback today?
“No, I think our policies have been right for the times and you can never answer the ‘what if’ question,” he explained. “I am 100% focused on moving forward.”
Jordan sounded different than our last interview in May 2023 – five months after the operational meltdown that forced the Dallas-based airline to ground its fleet and restart its operation.
This time, Jordan spoke with more confidence, sounding as if he had grown into his position – having guided the airline through a number of significant issues, including the December 2022 operational meltdown, the airline’s first-ever layoffs and abandoning long-held traditions such as ‘bags fly free’ and open seating.