Why Southwest Needed to Deliver a Sweet Credit Card Promotion
Photo Credit: A traveler looks out over Southwest planes at Fort Lauderdale-Hollywood International Airport last year. Southwest is trying to broaden its credit card base. Skift / Hannah Sampson
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Southwest lags behind some of its competitors in credit card revenue. But it is working on fixing that.
Southwest Airlines is the most consistently profitable U.S. airline, but it significantly lags behind its major competitors on credit card revenue. It wants to close the gap, and it's moving aggressively to win new customers.
This has become apparent in the past couple of months, as the airline offered an usually lucrative promotion for new customers who signed up for its co-branded credit card with JP Morgan Chase. Customers approved for it by Feb. 11 could receive a companion pass — it entitles the passenger to bring a guest on board for free — for the remainder of the year.
It could be a costly promotion for Southwest, depending on how many customers apply and how often they use the pass. But long-term, Southwest may earn major revenue from these new cardholders.
Card relationships are highly profitable for big airlines. In the first half of last year, Stifel analyst Joseph DiNardi estimated American Airlines generated about about $1.15 billion from its relationships wi
