Market Update: The US Airline That Once Focused On Economy Is Now Evolving Its Business Product – Full Analysis

Southwest Airlines spent decades winning customers with a simple promise: low fares, friendly service, and an intentionally unbundled airport experience that avoided many of the industry’s upsells. That formula built one of the strongest brands in the US. But it also created a ceiling for corporate travel managers and higher-yield business travelers who increasingly expect assigned seats, premium seating options, frictionless booking through managed-travel channels, and clear travel-policy alignment.

Over the last year, and accelerating into early 2026, Southwest has started pulling several big levers at once: assigned seating, extra legroom seating, new fare bundles, reworked loyalty economics, broader distribution through major GDS platforms, corporate self-service tools, and a growing roster of international airline partners. Executives are framing the changes as customer-led modernization that can unlock corporate share and higher-margin revenue, rather than a wholesale reinvention of the brand.

From ‘Loved By Flyers’ To ‘Chosen By Travel Managers’

Credit: Denver International Airport

Southwest’s rationale for evolving its business product starts with a blunt reality: the post-pandemic travel mix has tilted toward premium demand and managed travel expectations, while unit costs across the industry have risen. That combination makes it harder to rely on one-size-fits-all simplicity, especially when competitors can charge meaningfully more for seat choice, extra space, and corporate-friendly flexibility.

During the company’s fourth-quarter earnings call last month, CEO Bob Jordan argued that the changes are about “providing customers what they want today, which is different than what they wanted five and 10 years ago.” He waved away suggestions that Southwest was just imitating rivals, saying that Southwest’s product is unique and improving, and more appealing to business travelers:

“The product is a stronger offering now, especially with corporate. We think we can grow our corporate share, increasing our corporate customer base driven by product changes that better appeal to the business traveler.”

COO Andrew Watterson made the corporate-travel angle even clearer: Southwest had built much of the infrastructure, but lacked what he described as the product that corporate travelers want to buy. With the new product in place, he said Southwest plans to combine it with marketing, sales execution, and incremental distribution efforts, and expects upside to corporate business beyond what’s already in guidance.

What Southwest Has Done So Far For Business Customers

Credit: Southwest Airlines

The headline shift is operational and visible: Southwest has overhauled its fare structure, moved toward assigned seating, and introduced extra legroom seating across its fleet — three changes that make the airline easier to sell into corporate programs where predictability matters. Out with the “Wanna Get Away” tickets, and in with a fare program that ranges from “Basic” to “Choice Extra”, with the top tier stacked to appeal to business travelers: Early boarding, extra legroom seats, two free checked bags, free Wi-Fi, refundable tickets, and more.

The adjustment to fare structure has led to three assigned seating choices for passengers, based upon the type of ticket purchased. Southwest’s hope is that those flying on the company dime will default to the Choice Extra tickets that offer the best seats:

While changes to seats and bags are getting all the headlines, Southwest has been making a raft of other changes as well, all geared towards capturing share with business travelers. In 2025, the airline underwent a dramatic up-shift in partnerships for international connectivity, creating interline relationships with Icelandair, China Airlines, EVA Air, Philippine Airlines, and Condor. Then, earlier this year, perhaps its biggest announcement yet, a transatlantic partnership with Turkish Airlines.

Behind the scenes, Southwest has also continued leaning into managed-travel distribution. The airline now makes content available across the three major GDS platforms and emphasizes standard settlement via ARC, reducing friction for corporate programs and TMC workflows. The airline has also built tools for corporate travel managers and travel arrangers. A notable example is Southwest Business Assist, positioned as a self-service portal intended to streamline corporate program support, reduce administrative friction, and help travel buyers and decision-makers manage key tasks more efficiently.

Related

Southwest Airlines’ Big Shift: All The Changes At The World’s Largest Low-Cost Carrier

The Dallas-based airline has announced a raft of changes that are causing an uproar with its most loyal customers.

Credit: Shutterstock

Extra legroom is a meaningful step, especially for short-haul business routes where travelers value predictability, bin space, and getting off the plane quickly. But what Southwest is offering is still fundamentally an economy seat with more pitch, and that deficit to competitors that have a full-blown domestic business class cabin matters when corporate share is the target.

Southwest’s extra legroom offering remains a far cry from what Delta Air Lines and United Airlines offer at the sharp end of their domestic aircraft, so for now, the legacy carriers have a distinct advantage with business customers. Indeed, when you consider how other value-oriented carriers sell a higher-end seat, with some doing it with a genuine business class hard product, Southwest still has a lot of ground to make up.

On competitive routes, and Southwest flies a lot of those, the premium story is increasingly about a true front-cabin experience: wider seats, fewer seatmates, and meaningful service differentiation. For many corporate contracts, the question is not only “Is there more legroom?” but “Is there a premium cabin that is policy-compliant without exceptions?” Southwest has recognized this, and earlier this year PYOK reported that Jordan has said that the carrier is “seriously considering” equipping at least some of its Boeing 737s with bigger, plusher seats up front.

Enhancing Southwest Business Assist

Credit: Denver International Airport

Southwest Business Assist used to be a basic self-service corporate travel portal focused on program administration. This was limited to request management plus standard dashboards and reporting to help travel managers understand spend and activity. It was useful, but for many corporate buyers it still sat alongside a lot of manual exception-handling — especially around credits, name changes, and other “please help us” requests that can bog down travel managers and TMCs.

Over the past years, Southwest has made Business Assist much more transactional and automation-driven, adding tools that convert it from a reporting portal into an operations console. The clearest step-change was introducing Partner Benefits (often described as “waivers and favors”) and tying it to a contract credit bank. Now, corporate customers can earn and redeem credits for things like A-List / A-List Preferred upgrade requests, name changes, and access to a no-show report, directly through the portal.

Most recently, Southwest has been adding higher-value program oversight capabilities that travel managers actually use in supplier management and duty-of-care workflows. These include new on-time performance reporting and duty-of-care dashboard enhancements, plus “new” reports like Top Travelers and streamlined online request handling. In short, Business Assist has moved from being ‘a place to look things up’ to ‘a place to run a corporate program.’

Related

Why Southwest Airlines Is Moving Away From Point-To-Point Flying

With this change to ‘high-density stations,’ Dallas-based Southwest will aim to offer more flights to more destinations.

The Big Missing Piece: Lounges

Credit: Shutterstock

If you ask frequent business travelers what a premium airline experience means, airline lounges are near the top of the list, especially for same-day trips, irregular operations, and heavy road-warrior schedules. Southwest has historically stayed out of the lounge business, prioritizing simplicity and lower overhead.

However, the conversation is no longer hypothetical. Jordan said last year that Southwest is open to the idea of lounges as part of a broader premium evolution, and the airline recently won approval to open its first lounge at Honolulu International Airport. It is expected to span over two floors and cover 12,000 square feet, and will be located in Terminal 2, where all Southwest Airlines flights operate.

But this is just dipping the first toe in the water, and Jordan has said that a lounge network would ensure loyalty and growth, enabling the airline to offer a premium credit card with lounge access.

“I think lounges would be a huge, next benefit for our customers. You [would] have a lounge network that allows you to offer that premium credit card that provides lounge access.”

To ground the question of ‘where would a lounge network make sense?’, here are Southwest’s busiest airports by daily departures, an operational proxy for where lounge demand and scale would be most plausible:

Beyond Honolulu, Southwest would likely pilot lounges at a limited number of bases where daily movements are large enough to warrant them. However, access to space at some high-traffic airports like Denver or Phoenix might limit its options, so it would likely choose airports where it dominates traffic, giving it more leverage with the airport authorities. The most viable candidates are therefore Midway International Airport, Dallas Love Field, and Houston Hobby Airport, where Southwest has scale, frequency, and a high likelihood of business travelers connecting or arriving early.

The Final Frontier: Long-Haul International Flying

Credit: Denver International Airport

The final piece of the puzzle for business travelers is long-haul international flights. While Southwest flies internationally to Mexico, Central America and the Caribbean, its long-haul expansion to date has been partnership-led. This is because interline relationships are a fast way to add global relevance without introducing new aircraft types or long-haul operational infrastructure.

The bigger strategic question is whether partnerships are the destination or a bridge. Public reporting has quoted Jordan expressing interest in long-haul flying, while also emphasizing that any such plans are still early. However, if Southwest were to go that route, it would join a growing list of global budget carriers that have recently signaled their intention to expand into long-haul flying:

• IndiGo
  placed its first-ever widebody order in 2024 for 30 Airbus A350-900 aircraft, and doubled its commitment in 2025. Deliveries are expected to begin in 2027. To bridge the gap, IndiGo currently operates damp-leased Boeing 787-9s, flying to London, Manchester, and Amsterdam.
• flydubai
  has historically been an all-Boeing 737 operator, but ordered 30
  Boeing 787-9
  s in 2023. The first aircraft is expected to arrive in late 2027, with the full fleet delivered by 2033.
• flyadeal
  , a subsidiary of Saudia Group, placed its first-ever widebody order last year for 10
  Airbus A330-900
  s, with purchase rights for 10 more. The first aircraft are set to be delivered next year.
• flynas
  has also signed for 30 Airbus A330-900 widebody aircraft as part of a larger 160-aircraft deal.

For Southwest, pursuing long-haul operations would mean doing away with its legendary strategy of fleet simplicity, and choosing an aircraft with the range and cabin requirements for long segments. Given its long-standing relationship with Boeing, this would likely mean a Dreamliner purchase, potentially the Boeing 787-10, which would provide it with the lowest seat mile costs.

For now, the near-term focus is likely to remain on a strengthened domestic premium offering for business travelers. Longer term, a lounge network and long-haul flying would be major strategic swings — big, expensive, but potentially transformative.