Southwest Confirms Airport Lounges Are In The Works — Here’s What We Know

Southwest Airlines is ditching its no-frills legacy, confirming plans to build its first-ever airport lounges. With spaces secured from Honolulu to Dallas, the carrier is targeting premium travelers and expanding its Chase credit card perks.

Southwest Airlines confirmed it is developing its first-ever airport lounges, securing leases in five major cities to expand its Chase co-brand credit card partnership and attract premium-paying travelers.

Chief Executive Officer Bob Jordan disclosed the plans during the carrier’s second-quarter earnings call Thursday, ending months of speculation about a project long teased but never formally announced. Jordan stopped short of unveiling a national lounge network, but he confirmed that work is actively underway.

“We fully intend to continue to expand the co-brand offering and opportunities for our customers. I know I’ve teased the lounges. That’s something, obviously, that there’s work underway. We’re not ready to formally announce that yet. The whole purpose, again, is to expand co-brand opportunities, expand the card set, and provide to our customers something that they really, really want,” Jordan said.

The confirmation marks an unprecedented first for Southwest, which has never operated its own airport lounges in more than five decades of flying. The airline built its identity on an egalitarian, no-assigned-seats model, but that approach has been unwinding since activist investor Elliott Investment Management took an 11% stake in the company in June 2024 and pushed for changes it said would boost shareholder value. Southwest and Elliott reached a settlement in October 2024 that gave the fund five board seats while allowing Jordan to keep his job and carry out the overhaul, which already includes the end of open boarding — assigned seating took effect for all travel starting Jan. 27, 2026.

Southwest has secured lounge space at Austin-Bergstrom International Airport, Dallas Love Field, Nashville International Airport, Denver International Airport and Honolulu’s Daniel K. Inouye International Airport, according to the airline. The most advanced project is in Honolulu, where the State of Hawaii Department of Transportation approved a direct lease for a “VIP Airline Lounge” in Terminal 2. The space spans 12,241 square feet across two levels in an area that formerly housed the airport’s Garden Conference Center. The five-year lease requires Southwest to invest at least $20 million in improvements, with rent set at $156.14 per square foot annually — close to $1.9 million a year — though the state waived rent for the first 12 months to encourage faster construction.

In Austin, building permits filed under the name “Project Oasis” describe a 20,000-square-foot lounge build-out targeted for completion by March 1, 2027, part of a broader lease that could grow to 40,000 square feet. In Denver, Southwest recently added 16 gates in the Concourse C-East expansion, giving it a 40-gate footprint that positions the airline to compete more directly with United Airlines in the Mountain West.

The lounges are expected to be tied to Southwest’s credit card partnership with Chase. The airline’s existing Southwest Rapid Rewards Priority Card carries a $229 annual fee and includes perks such as priority boarding and progress toward A-List elite status. Chase already operates eight lounges nationwide and opened an 18,000-square-foot Sapphire Lounge by The Club at Dallas Fort Worth International Airport on July 16.

Southwest reported adjusted operating revenue of $8.7 billion for the second quarter, an all-time quarterly high for the airline, even as fuel costs rose by $889 million year over year. “Second quarter results demonstrate the earnings power of our business. We delivered results well ahead of consensus expectations despite nearly $900 million of additional fuel expense year-over-year,” Jordan said. He added that “our business model now benefits from a broader and more diversified set of revenue and commercial levers than at any point in our history. Momentum across managed business, Rapid Rewards, and our Chase co-branded credit card, together with continued robust demand for our enhanced product offering, reinforce the strong progress we are seeing across Southwest.”

Not everyone is convinced the pivot is the right call. Mike Boyd, an aviation analyst with Boyd Group International, wrote in a January 2024 blog post that “it is becoming very obvious that Elliott Management has the brilliant idea that if they make WN look just like every other airline and adhere to their template of what an airline should be, shareholders will be just thrilled with the increase in the stock price.” Reaction among Southwest’s customer base has also been split, with some longtime elite fliers voicing concern on aviation forums and social media over the loss of open boarding and free checked bags, while corporate travelers have welcomed the new assigned seating and lounge access.

Legacy carriers and other lounge operators typically reserve airport lounges for their most loyal customers — frequent fliers, elite-status members and heavy spenders on co-branded cards. Southwest, the world’s largest low-cost carrier and the largest operator of the Boeing 737, has long avoided that model, flying only 737-family aircraft to keep maintenance, training and crew-scheduling costs down. Building lounges at Southwest’s airports, which operate under Federal Aviation Administration Part 139 certification, requires extensive coordination with airport authorities and the Transportation Security Administration to meet secure, post-checkpoint terminal requirements — a process that helps explain why the Austin project isn’t expected to open until 2027.