Dive Brief:
- Southwest executives touted the airline’s work to advance loyalty — from overhauling the Rapid Rewards program to allowing loyalty members to use their points with international travel partners — during a Q3 2026 earnings call Thursday.
- The Rapid Rewards upgrades will start in 2027 and continue throughout the year. Beginning Jan. 1, 2027, a new platinum tier featuring perks like a free companion pass will be available to Rapid Rewards members. In the spring, customers will be able to use their points with international carriers that have partnered with Southwest, including Icelandair, China Airlines and Etihad Airways. In fall of 2027, customers will have the ability to redeem points for ancillary purchases, including seat selections.
- “A lot of the initiatives that we are now moving to and are in the process of executing on now relate to improving that loyalty revenue,” CFO Tom Doxey said on the earnings call.
Dive Insight:
Southwest’s loyalty initiatives span the Rapid Rewards program, a new premium credit card, lounges and more. These initiatives build off each other and together strengthen the value proposition of Southwest and boost revenue, executives said.
“We don't view these as standalone products,” CEO Bob Jordan said on the earnings call. “They are designed to work together as a connected loyalty ecosystem that expands the value of rep rewards, strengthens customer engagement, and creates additional opportunities to grow both loyalty and the economics of the program over time.”
Southwest is planning on opening a series of lounges in the fourth quarter next year. Construction is underway at airports in Austin, Texas, Baltimore, Honolulu and Nashville, Tennessee, and the airline has at least seven additional locations planned.
With premium cardholders able to access the lounges, the lounge networks will serve “as the foundation for a new premium credit card,” Jordan said. “Premium cards have been among the strongest performing products in the co-brand market, and this gives Southwest an opportunity to participate in that segment for the first time.”
Like United Airlines, Southwest is investing in retrofitting its fleet with Starlink to provide in-air high-speed satellite Wi-Fi. Starlink is available to Rapid Rewards members for free, and the airline expects to roll it out across the fleet by the end of 2027.
The thesis behind the airline’s recent international partnerships is that there is an “opportunity to extract value from members who are wanting to go international beyond where our network takes us today,” Tony Roach, EVP and chief customer and brand officer at Southwest, said on the call. “It's giving those members the opportunity to take those aspirational trips.”
All of these changes are meant to deliver value throughout the customers’ travel journey.
“We're evolving Rapid Rewards from a program that primarily rewards customers for flying with Southwest into one that delivers value throughout the travel journey,” Jordan said. “Together, these enhancements make Rapid Awards more engaging, more flexible, and more valuable for our members, while strengthening the role that loyalty plays across the Southwest experience.”
Southwest also touted being the first U.S. airline to make flight shopping available through ChatGPT.
“As more customers use AI tools to research, plan, and ultimately book their travel, this allows Southwest to engage earlier in the decision-making process and create a more seamless path from trip planning to booking,” Jordan said.
Southwest reported third quarter 2026 operating revenues of $8.4 billion, up 21.2% year over year. The airline also reported net income of $270 million, despite fuel prices increasing $821 million year over year
