Usually, when a company takes things away, adds new fees, and starts charging for things it once gave away, consumers get mad. Southwest Airlines has had a very different experience.
When I used to fly 20-25 trips a year, I was very loyal to Southwest Airlines because, aside form early boarding options, the price was the price. I didn’t have to pay for a boarding pass, check luggage, or anything else aside from alcohol and WiFi.
The airline, at least back then, clearly put its passengers first and positioned itself as an outlier in the industry. Southwest Airlines used the term “tranfarency” to mock the hidden charges typical to its rivals.
As a passenger, I appreciated being able to buy a ticket and, due to my loyalty status, not even having to check in for my flight. It was an easy way to fly where the prices were fair and did not come with a gotcha.
It would seem like that would drive a successful business, but Southwest has abandoned most of what made it unique, and its business appears to have improved. That’s something CEO Bob Jordan tried to explain during Bernstein’s 42nd Annual Strategic Decisions Conference.
Southwest Airlines has grown its business
Southwest’s results suggest that the airline’s shift away from its old model has not alienated customers in the way many longtime passengers might have expected.
Jordan believes, or at least publicly supports, the idea that consumers want to pay for extras that Southwest used to not even offer. The numbers he shared support that.
“They want access to extra legroom and different products. Just as an example only, our March business revenues were up 25% year-over-year, and that trend has sustained itself in April and May, which is a great sign,” he said.
He also made it clear that the airline has not tried to insulate its customers from rising fuel costs.
“The biggest question, of course, is, what is the consumer doing now? The industry with fuel up has had 7 consecutive fare increases since February 1. Southwest has participated in all of those,” he added.
Raising prices, he added, has not hurt sales.
“That’s the most that I could remember in my 38 years in the industry. But with fares up that much, there’s been no drop-off in demand at all. So no indication that the consumer is elastic in this fare environment,” he said.
Jordan thinks Southwest can continue passing fuel costs on to customers and suggested that the airline can perhaps not lower prices if fuel costs fall.
“I’m becoming increasingly bullish that we will be able to cover these fuel increases with revenue increases. As you look forward, I think the last thing — maybe one of the questions at some point — is whether fuel will abate and you’ll see fuel prices come down. One of the questions, of course, is, well, how sticky will these increases be?” he added.
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Southwest Airlines follows the industry
What Jordan essentially said is that Southwest doesn’t have to be the cheapest; it has to be in line with its rivals on base price and, like most other airlines, it can also pad its bottom line with extras like selling seat choice and extra legroom.
RTM Nexus CEO Dominick Miserandino thinks that the airline may not have had a choice making these changes.
“Jet fuel is through the roof, labor costs doubled, and Boeing isn’t delivering planes fast enough. The old way doesn’t pay the bills,” he told TheStreet.
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With Spirit Airlines no longer serving as a check on price nationally, Southwest, Miserandino noted, has more freedom to go after the dollars its rivals are already bringing in.
“Delta and United make billions charging for checked luggage and selling extra legroom. Southwest was just leaving all that cash sitting on the runway. Passengers complain about $35 bag fees, but they still buy the flight. They made the change because you can’t give away perks for free when the margins aren’t there,” he added.
Here’s what consumers say they want
Americans are actually pretty satisfied with air travel, according to Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, latest annual survey, Air Travelers in America.
And, while that source may seem biased, the research was contracted out to Ipsos. Some of the findings included:
- 87% of respondents ranked price as one of their top considerations.
- 78% ranked schedule convenience as one of their top considerations.
- Everything else, including loyalty/frequent flyer perks (33%), airline customer service (32%), personal space associated with airplane seat (30%), and perception of airline’s safety record (20%), received much lower rankings.
Nearly half of American adults flew last year, and 72% of flyers were satisfied with their air travel experience last year. Only 3% were “very dissatisfied, according to the report.
The Air Travelers in America survey was conducted Jan. 5-19, 2026, and screened a national sample of 3,847 American adults (age 18 or older) via the probability-based Ipsos KnowledgePanel.
Spirit’s death had a pricing impact
The impact of Spirit’s eventual demise was felt before the airline actually declared bankruptcy.
Spirit’s exit from about 90 routes was followed by a 14% increase in average fares, versus 6%-7% where Spirit remained, according to Business Insider.
Right after Spirit’s Chapter 11 bankruptcy filing, Northeastern Professor John Kwoka shared his thoughts on what would happen with the university’s Global News publication.
“The legacy carriers will pick up some of Spirit’s routes, but not at the same price, and in addition, they will begin to limit or raise the price of their own rock bottom fare options now that they do not have to face Spirit,” Kwoka said. “This is exactly what has happened before when low-cost carriers exited, got bought, or folded.”
Similar patterns have followed the disappearance of low-cost carriers in the past.
“I think common sense says that with reduced ultra-low-cost carrier competition, fares can go up,” said airline expert Ravi Sarathy, a professor of international business and strategy at Northeastern’s D’Amore-McKim School of Business.
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