Southwest Airlines isn’t a low-budget airline like Spirit or Frontier, but it has always been known as a budget-friendly airline that aims to provide perks to travelers without changing premium prices.
It’s been moving away from that image lately, though. Most notably, the airline eliminated its Bags Fly Free branding and joining the rest of the airlines in charging an exorbitant sum to those who actually want to bring their things along when they travel.
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The CEO has made clear that the changes the airline is making are part of an intentional plan to move toward a more premium experience, which also includes eliminating the option to choose your own seat, adding Premium Seating with extra legroom, updating its boarding process, and potentially even adding airline lounges in the future.
“We’re now ushering in a new era at Southwest, moving swiftly and deliberately to transform the Company by elevating the Customer Experience, improving financial performance, and driving sustainable Shareholder value,” said CEO Bob Jordan.
Now, the airline has made yet another change that signals it is no longer interested in catering to travelers who prioritize affordability.
Image source: William Thomas Cain/Getty Images
Southwest Airlines’ credit card fees may anger customers
The latest sign that Southwest is shedding its discount roots comes from a shakeup in its credit card lineup.
Southwest offers several co-branded credit cards with Chase, and it shared on July 24 that it would be making several big changes to the cards effective immediately. Specifically:
- The Southwest Rapid Rewards Plus Card annual fee is increasing from $69 to $99.
- The Southwest Rapid Rewards Premier Card annual fee is increasing from $99 to $149.
- The Southwest Rapid Rewards Priority Card annual fee is increasing from $149 to $229.
- The Southwest Rapid Rewards Premier Business Card annual fee is increasing from $99 to $149.
- The Southwest Rapid Rewards Performance Business Card annual fee is increasing from $199 to $299.
These are fairly significant changes, with fees rising between 43% and 54%.
Related: Southwest Airlines cancels hundreds of flights from July to Sept.
Southwest Airlines’ credit card changes come with new features
Of course, Southwest is not just significantly raising the cost of its credit cards. The airline will add new features, including:
- Free bags: The cardholder and up to eight companions on the same reservation will each receive one free checked bag (a nice perk, but one that every Southwest customer used to enjoy).
- Boarding perks: Group 5 boarding will be available to the cardmember and up to eight companions on the same reservation.
Depending on the card you have, you’ll also be able to reserve your seat before departure.
Other card-specific changes are happening as well, including the elimination of foreign transaction fees on the Southwest Plus Card, new bonus reward categories that provide the chance to earn added rewards, and faster options to earn elite status.
“We believe that our existing cardmembers as well as the new cardmembers will see the real and measurable value that the benefits convey, as well as increased flexibility and increased choice,” Corbitt Burns, Southwest managing director of cobrand and payments, told The Points Guy.
Related: JetBlue cancels all flights to major US airport, offers customer refunds
Southwest Airlines’ business model is changing
While the new perks are nice, travelers who don’t have big budgets are probably not going to be thrilled about a 50% hike to their Southwest Airlines cobranded credit cards – especially given that some of the perks like free bags are things they used to enjoy for free.
The reality is, Southwest Airlines is clearly going through a major identity shift as the company focuses on attracting higher-end travelers, including those willing to pay a $300 annual fee to get credit card perks.
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