Quote of the Week
“We're not trying to be one of the other airlines. We're taking things that have always made Southwest unique, and we're adding capabilities that we've never had before.” —Justin Jones, Chief Commercial Officer, Southwest Airlines
Your airport lounge options are about to expand thanks to a player many didn’t expect: Southwest Airlines.
Since CEO Bob Jordan took the reins (I had the privilege of interviewing him on his first day), much has changed. Open seating and free checked bags are things of the past. The addition of Southwest’s first “Icon Lounges” in 2027 will be a further shift in amenities, and identity.
The first four Southwest lounges will pop up at hubs central to the airline’s strategy:
Austin-Bergstrom International Airport (AUS)
Baltimore/Washington International Thurgood Marshall Airport (BWI)
Nashville International Airport (BNA)
Daniel K. Inouye International Airport (HNL) in Honolulu
The airline also announced plans for a premium credit card and more generous loyalty benefits.
The announcements came as Southwest reported record third-quarter revenue and strong returns from the aforementioned overhaul of seating, fares, and fees. We will look at those developments below, along with Bloom Energy’s remarkable growth and some significant decisions at American Express.
Southwest Airlines (NYSE: LUV)
Q3 FY2026 Earnings Call
Results: Southwest executives were highly upbeat about the airline’s transformation, declaring that its major commercial changes are complete and that results are exceeding expectations. Revenue rose 21.2% to a third-quarter record $8.4 billion, with adjusted earnings of $0.66 per share, up 500% year over year. Adjusted operating margin expanded to 5.4% despite an $821 million increase in fuel costs. Management expects full-year adjusted earnings of $2.60 to $2.85 per share.
Higher fares and fewer perks are not weakening demand
Southwest’s decision to abandon several longstanding practices, including free checked bags and open seating, has produced a remarkable improvement in revenue.
Average fares rose approximately 27% year over year, yet passenger volumes remained strong. Revenue per available seat mile increased 21.6%. Business travel was particularly encouraging, with passenger counts up roughly 9% and revenue up 29% on essentially flat capacity.
Bob Jordan, Southwest’s president and CEO, said:
So while fares have accelerated certainly a lot here in 2026, and you’ve got to remember that while they’re up, they remain below 2019 in real terms. Our customers are continuing to respond, and we’re seeing -- Justin said this, we’re seeing that both in higher passenger volumes and in yield. So it’s not -- those higher fares are not causing an erosion of volumes.
The changes are also having a substantial impact on profitability. Southwest expects assigned seating and extra-legroom products to contribute approximately $1.5 billion in incremental operating earnings in 2027, up from $1 billion in 2026.
