Southwest will partner with Icelandair and at least one other yet-to-be-named airline, giving customers and Rapid Rewards points hoarders a way to get to Europe and beyond starting sometime next year.
That groundbreaking news was spelled out in a Southwest presentation and confirmed by Icelandair itself ahead of a full investor event later Thursday morning. That new agreement should eventually allow Southwest travelers to easily book Icelandair flights over to Reykjavik (KEF) while also allowing European travelers to connect throughout the U.S. on Southwest's network.
That's just one piece of Southwest's massive turnaround plan that has been in the works for months. Southwest's presentation also outlines more of its plan to install some more spacious seating with up to 36 inches of legroom while shrinking seats slightly throughout the rest of the plane; ditch its first-come, first-served seating model in favor of assigned seating for additional fees; and reduce flights in and out of unprofitable airports like Atlanta (ATL), Fort Lauderdale (FLL), and within the Hawaiian islands; among others.
And long after other U.S. carriers began raking in billions by charging separately for bags, Southwest reiterated its commitment to continue giving each and every passenger two checked bags for free. The airline said that generous policy makes them more in additional ticket revenue than they lose by not charging for bags.
Details and timing for its partnership with Icelandair and other initiatives were unclear as of publication. Southwest executives were expected to share more information with investors Thursday morning.
After decades as the most successful carrier in the U.S. airline industry, Southwest has been struggling financially in the post-pandemic travel boom – and under pressure from an activist investor to make monumental changes. Americans' travel preferences are changing, from their willingness to pay up for premium seats (which Southwest doesn't have) to their eagerness to fly to Europe (where Southwest can't bring them).
A partnership with Icelandair solves that last problem, finally giving Southwest's rabid fans and flyers a way to get overseas. And it's a turning point for an airline that has prided itself on its independence: While other major U.S. carriers partnered up with dozens of other airlines and formed alliances, Southwest has gone it alone.
That changes with this news. According to a release from the Icelandic low-cost carrier, the two airlines signed a memorandum of understanding “to initiate a bilateral partnership in 2025.” That should allow Southwest passengers to book tickets flying throughout the U.S. before connecting with Icelandair over to Reykjavik (KEF) or elsewhere throughout Europe.
Their partnership will begin in Baltimore (BWI), a Southwest stronghold with hundreds of daily flights and one of Icelandair's 14 U.S. nonstop routes. The timing is unclear, though Southwest's presentation said it would launch its first partner transatlantic connectivity in “early 2025.”
In a separate slide in its presentation, Southwest made clear that travelers with Rapid Rewards points will be able to redeem them for a trip to Europe on Icelandair, too.
“Icelandair will become our initial partner through a shared focus on warm hospitality and value in air travel that both carriers strive to offer, enabling Southwest to further our global reach beyond the nearly 120 destinations we serve in North America,” Ryan Green, Southwest's executive vice president of commercial transformation, said in a statement.
In what's surely not a coincidence, Icelandair also announced Thursday it would begin nonstop service to and from Nashville (BNA) starting next May. That's an airport where Southwest has laid out plans to expand its presence next year with more frequencies and new routes.
Interestingly, Icelandair already partners with U.S. airlines JetBlue and Alaska, making Southwest its third pact with a U.S. carrier. Even more interestingly, it won't be the first time Southwest and Icelandair have gotten together: The two carriers teamed up on a similar deal in the late 1990s that quickly fizzled out.
This time around, Southwest won't stop with just one partnership. In another slide, the airline said it would “add at least one more partner in 2025.”
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