Southwest Airlines is expected by many to announce its first flight to Europe, launching Iceland service next year.
After destroying their brand in an epic self-own, introducing unannounced new nickel and dime charges they’d said they wouldn’t, and imposing punitive changes on elite frequent flyers, the airline would love nothing more than to change the narrative. Flying to Europe would help do this.
However, Southwest Airlines has traditionally been a domestic airline with a little bit of short-haul international to places like Mexico and the Caribbean. They fly one Boeing 737s, which limits their reach. And they haven’t had other airlines as partners to provide their customers with onward connections in Europe, South American or Asia. That’s made flying long haul a complete non-starter. But there’s one obvious place they can go.
Southwest Airlines has started to partner with other airlines. Their first partner is Icelandair. (They will also interline with China Airlines.)
The Boeing 737 MAX can make it to Iceland from Southwest strongholds like Baltimore, no need for a new aircraft type.
Iceland is a strong seasonal (summer) destination but also an efficient connection point for the rest of Europe.
Enilria predicted that Southwest Airlines would announce Reykjavik service next year, reporting on word that the airline had reached an agreement with its pilots that would allow codesharing with Icelandair. They would be able to sell tickets to their customers wishing to fly not just to Iceland but to points beyond where Icelandair flies.
A TD Cowen report on Southwest now expects Reykjavik as well, suggesting that it would be attractive to credit card customers (presumably both as a destination and as a way to connect to Europe using Rapid Rewards points). Much of the impetus for Southwest’s going big into Hawaii was related to the credit card. It’s also within the range supported by their existing aircraft.
At the same time, Southwest faces the same challenges they’ve created for themselves domestically. No longer differentiated as a product by free checked bags or travel credits that don’t expire, they’ve become just like all the other airlines but worse. They offer no first class, no lounges, or seat back entertainment. Their wifi is barely functional and their seats offer only USB power. The planes lack galleys capable of a proper meal service.
So why would a passenger choose Southwest for transatlantic travel? Why would they connect in Iceland rather than flying non-stop from a major U.S. city? Southwest would be entering the highly seasonal market with an inferior product that could only with the lowest price, at the same time they face higher costs that result from partnerships and interlining baggage. That hardly looks like the kind of growth prospects that should excite customers or investors.
More From View from the Wing