Southwest Airlines has announced a partnership with Icelandair to begin in 2025 and teases that they will launch a second airline partner in 2025 with a long-term goal of building a more global network. On the one hand, it shouldn’t be a surprise that Southwest is making moves to more closely mirror other major carriers, but this obviously marks a huge strategic shift that we can hope creates opportunity for Rapid Rewards members. The announcement also referred to some as-yet-unannounced elite and cardholder changes that we may see coming in 2025.
Southwest partnering with Icelandair in 2025
According to the press release, the aim here is to grow passenger volume, presumably by feeding European customers to Southwest flights. I think that’s potentially a great move for Southwest as they obviously have a large US network and could likely be tapping into far more customers with some sort of a codeshare relationship.
The initial gateway for the partnership will be BWI, with expansion beyond that expected. At this point, we don’t know the extent of the partnership as the announcement is very light on details, but it does note the intention to eventually give customers the ability to redeem points for international flights, though we of course do not yet know what that will look like.
Southwest to focus on more “Global partnerships”
I find it particularly interesting that Southwest highlights a desire for more global partnerships to expand its network. It sounds like Icelandair won’t be the only new partner coming in 2025:
- Global Airline Partnerships: Southwest is formalizing partnerships with international carriers to expand its network and connect Customers with more global destinations to generate additional demand for travel across the Southwest network. Icelandair will become Southwest’s initial partner with an expected launch in 2025 through Baltimore-Washington International Airport, which will serve as its first U.S. gateway for the carriers. The Icelandair partnership will expand gateways throughout 2025, and Southwest intends to add at least one additional partner carrier next year.
This of course begs the question as to which airline(s) Southwest may launch as an additional partner in 2025.
Given that Southwest already has some reach in Latin America, could we see them partner with an airline that would broaden its reach across that region? Will they partner with Zipair, which serves both Honolulu and a few major west coast markets and would instantly give Southwest an interesting amount of reach across both the Atlantic with Icelandair and Pacific with Zipair?
Obviously we don’t yet know, but I’ll be very curious to see how partnerships pan out both for Southwest and, more importantly, for Rapid Rewards members.
Will we be able to redeem Southwest Rapid Rewards points for Icelandair flights?
Unfortunately, it doesn’t look like we’ll be able to redeem Rapid Rewards points for flights in the near-term. Furthermore, even when it becomes possible, the wording in the announcement leads me to believe that redemptions probably may not be at the type of value that we’re accustomed to seeing with Southwest Rapid Rewards points since it mentions that members “will have more opportunities” (rather than similar / the same opportunities) and it points to both the partnership and evolution of “Getaways by Southwest” rather than referring to more typical award redemptions.
Eventually, Rapid Rewards Members also will have more opportunities to earn and redeem points for longer-haul international destinations with development of its airline partnerships and the evolution of its Getaways by Southwest product
Of course, that’s pretty vague, so it’s hard to know for sure what point redemption might look like, but at the very least it doesn’t sound like that will launch with the beginning of the partnership. While I’m sure that the “evolution” of the “Getaways” vacation package solution will include the ability to use points for your vacation package, I imagine that won’t be at terribly exciting value.
All that said, it certainly would be exciting to see Southwest make its points applicable to itineraries that include Icelandair if points did at least maintain their current value against paid airfare, particularly since Icelandair’s “business class” (which more closely resembles premium economy) can often be had for a reasonable enough cash price.
Will we see Southwest launch a more traditional zone-based award chart for international partners? While that seems far-fetched on the surface given the way it has long priced domestic awards dynamically based on cash price of a ticket, there is obviously some precedent for Icelandair in negotiating such a deal since they already partner with Alaska Airlines Mileage Plan. If we did see a more traditional zone-based chart for Icelandair flights, it could certainly make Southwest Rapid Rewards points more appealing.
Other “enhancements” coming for elite and cardholders
The announcement also foreshadows some changes coming for Rapid Rewards:
Rapid Rewards®3 Enhancements: Throughout the transformation, all Members will earn and redeem points at the same rate that they do today, and Southwest will continue to offer no blackout dates, uncapped reward seat availability, and points that don’t expire. The airline will update its Tier Benefits with the transformation giving A-List and A-List Preferred Members even better benefits. The airline also soon will share updates to its credit card program, including how assigned seats and premium seating will offer Cardmembers even more value. Until then, Cardmembers will continue to take advantage of their current card benefits.
I always get nervous when a loyalty program touts coming “enhancements”. In this case, it sounds like Southwest will continue to make every seat available for redemption as it does today, though the lack of detail certainly leaves the door open for further devaluation by making the points worth less on a per-dollar basis since the announcement makes no promises about maintaining a consistent value proposition. My best guess is that points will be worth more toward Southwest flights than for itineraries that include segments on Icelandair (or other partners as they develop), though details obviously remain to be seen.
It comes of no surprise to me that Southwest intends to add tier benefits for A-list and A-list Preferred Members. Since Southwest will begin selling assigned seats in late 2025 for travel in 2026, I have to imagine that at the very least elite members will get some sort of free seat selection benefit. It will be interesting to see if they add any additional benefits beyond seat selection as well.
Perhaps of even greater interest is the mention of updates to Southwest’s credit card program and the specific call-out of that as it relates to how assigned seats and premium seating will “offer Cardmembers even more value”. It certainly sounds to me like we may either see some cards offer free seat selection or (perhaps more realistically) seat selection fee reimbursements (no doubt with an annual limit). I’m sure we’re quite far off on getting more detail, but I’m glad to hear that something is in the works for cardholders.
Bottom line
Southwest is launching major changes in 2025, but perhaps the most surprising one (to me) is its coming partnership with Icelandair. While my excitement for this partnership is limited to cautious optimism at best since we have so few details about how it will work, I’m nonetheless glad to see Southwest start to grow a network that will hopefully have the capacity to offer more outsized value for those with Southwest Rapid Rewards points. We can hope!
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Nick never ceases to impress. Another well-written & informative piece by Nick. Thank you!
Southwest had a previous agreement with Iceland Air out of BWI
The announcement is actually pretty specific as far as whose points can be redeemed for whose flights:
“Customers will be allowed to book Southwest flights through Icelandair.”
That suggests to me that Rapid Rewards points won’t get you a ride on an Icelandair flight.
I highly doubt Zipair will be their partner, since they are wholly owned subsidiary of JAL. If there’s any transpacific international partner, it will most certainly need to not be in an alliance. That leaves basically Philippine Airlines, which could actually make a lot of sense. They could use the feeder traffic. But I think they will focus more on Latin America and Europe…maybe French Bee?
Looks like it will be more than just BWI as an early gateway… This announcement also came the same day as Icelandair announcing flights to BNA.
We Just flew Icelandair for the first time last week – its an amazing way to get EU from PDX for us we did a couple day layover before heading to Paris.
It’sa 7ish hour mid-day flight (3PM)- arrive KEF 6AM (10PM PDX/LAX time) easy to do in Coach thwn power through the day or use Timeshifter App)
KLM starts flying direct PDX-AMS 3X weekly 10.27.2024.
That said its hard to get get to the EU from West Coast without killing a day – EWR-LHR 7-AM – 8PM or to short of a red-eye to sleep in Biz. Even the SFO red-eyes land late afternoon. But they are long enough to sleep.
Will be intresting to see what the new partnership brings.
I too fear that the new card perks will be like the old four refunded early boarding credits.
I’ve always thought a partnership with Porter is pretty natural for WN. Offers WN customers better access to Canada and provides Porter loyalists with more Caribbean destinations.
Operating models are fairly similar and there’s a possibility to create a natural feeder for WN’s mega-hubs at MDW, PHX and MCO. Though Porter would need to connect to a heck of a lot more places than Bishop / YYZ out of MDW / PHX respectively for that to happen. The MCO feeder would be a lot more natural with PD serving YOW and YHZ in addition to YYZ. Porter could also shift from IAD to BWI in the DC area to synergize more with WN hubs.