Southwest Airlines CEO Bob Jordan recorded a message to employees during its media day on Oct. 15.
The message, which was leaked to View From the Wing, shared his vision for the company.
“We’re evolving to meet the moment, but we’re doing it in the Southwest Way: taking what has always made Southwest special and building on it to give Customers more choice, more comfort, and more value while keeping the experience accessible, approachable, and human,” he wrote.
That sounds nice, but the reality is a little darker. Jordan made it clear that he believes customers will accept paying more fees, higher fares, and spending money on things like baggage, which were once included.
“Jordan is redefining what employees are supposed to preserve about Southwest: their hospitality. The airline’s product, operating model and who their customers are can keep changing. And the message is framed to prepare employees to accept more changes,” View From the Wing’s Gary Leff wrote.
Southwest made a number of changes
Jordan, at least from what he said, appears to believe that Southwest can differentiate itself from its rivals not by offering a more affordable product, but by making sure its workers remain friendly.
He also made it clear that employees will be able to encourage sales of new items by being pleasant to passengers (something the airlines has long been known for).
“You will hear us describing these new offerings as ‘premium.’ For Southwest, premium isn’t about copying somebody else’s playbook or becoming something that we’re not. It’s about creating a better travel experience, delivered through the hospitality of our people,” he said.
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Leff did some interpretation on that remark as well.
“That’s the justification for adopting products Southwest historically rejected: the same employees delivering them with the same warmth makes those authentically Southwest products,” he posted.
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Southwest’s changes include a lot of new fees
Over the past year or so, Southwest has dropped many of the things that used to differentiate the airline from full-fare rivals, including United, Delta, and American.
- Southwest ended its “Bags Fly Free” policy for most customers in May 2025, introducing fees for the first and second checked bags, according to Reuters. At the time, the airline charged $35 for the first bag and $45 for the second.
- Southwest raised checked-bag fees to $45 for the first bag and $55 for the second, effective April 9, 2026, for applicable bookings. Some loyalty members and eligible credit-card holders still qualify for a free bag, according to the Southwest fee schedule.
- Southwest ended open seating on Jan. 27, 2026, switching to assigned seats and paid options for preferred and extra-legroom seating, according to the airline.
- Southwest replaced its old fare structure with four categories: Basic, Choice, Choice Preferred, and Choice Extra. Benefits vary by fare, including seat selection, boarding, and baggage allowances, according to a Southwest fare announcement.
- Southwest replaced its A/B/C boarding groups with Groups 1 through 8. Priority Boarding is available for $10–$75 per flight segment, according to the Southwest check-in and boarding web page.
Southwest’s changes are paying off financially
As a former multi-year A-List member of the Southwest Rewards program, which required 25 flights per year to earn, I’m no longer a fan of the airline. Under the old system, I paid one price for pretty much everything except early boarding and WiFi.
Now, I have to pay for a seat, boarding position, and checked bags. When flying multiple segments, I’m now charged $8 for WiFi separately for each one.
But while Southwest is no longer my airline of choice, I’ll fly it when it makes sense financially and schedule-wise. Jordan seems to be betting that being a conventional airline will open it up to more customers, and that does appear to have worked.
“Our business now benefits from a broader and more diversified set of revenue and commercial levers than at any point in our history,” he said during the airline’s second-quarter earnings call.
“The results demonstrate that the transformation is working, with a 9% after-tax return on invested capital and adjusted operating margin of 6.7% or a 3.3-point improvement year-over-year despite nearly $900 million year-over-year increase in second quarter fuel expense. We also generated nearly $2 billion in operating cash flow during the first half of the year despite record fuel expense,” he added.
Some highlights from the second quarter include:
- Net income of $233 million, or $0.47 diluted EPS; adjusted net income of $465 million, or $0.94 adjusted EPS
- Record operating revenues of $8.4 billion, up 16.4%
- Adjusted operating margin of 6.7%, up 3.3 points year over year, despite an $889 million increase in nominal fuel costs
- The return of $88 million to shareholders through dividends
Before the initial major change, dropping “Bags Fly Free,” airline industry analyst Henry Harteveldt of Atmosphere Research Group was skeptical of the change.
“This is how you destroy a brand. This is how you destroy customer preference. This is how you destroy loyalty. And this, I think, is going to send Southwest into a financial tailspin,” Harteveldt told CBS News. “Southwest, with these changes, becomes just another airline.”
Jordan, in his video to employees, made it clear that more changes are coming, and that consumers won’t mind as long as employees stay cheerful.
“So yes, you’re going to continue to see the Southwest experience evolve. But the goal behind all of this is pretty simple: give Customers more reasons to choose us, then deliver an experience that makes them want to stay and come back,” he said.
Related: Delta CEO says what a lot of flyers didn’t want to hear about airfares
