Airlines Strategy
Southwest Airlines Seeks Global Expansion via Open Skies Agreements
Southwest Airlines files for international route authority under Open Skies treaties, targeting growth in Europe and beyond with Boeing 737 MAX 8 and partnerships.
Southwest Airlines, long known for its domestic dominance and low-cost model, has taken a bold step toward international expansion. In May 2025, the Dallas-based carrier filed a request with the U.S. Department of Transportation (DOT) seeking blanket authority to fly to any country with which the United States has an Open Skies aviation agreement. This move marks a significant strategic shift as the airline aims to broaden its limited international footprint beyond Mexico, Central America, and the Caribbean.
The filing is more than a bureaucratic formality, it signals a potential transformation in Southwest’s business model. Historically focused on simplicity, efficiency, and affordability, Southwest is now exploring new markets that could present both growth opportunities and operational challenges. The expansion comes amid broader changes at the airline, including the introduction of new fare structures, partnerships, and a reevaluation of its fleet strategy.
In an increasingly competitive aviation landscape, Southwest’s pivot toward international markets could reshape its position in the industry. The implications of this move extend beyond route maps, touching on regulatory frameworks, fleet capabilities, and the evolving expectations of air travelers.
Open Skies agreements are bilateral or multilateral treaties that allow airlines from participating countries to operate freely between each other’s territories. These agreements eliminate government interference in pricing, routes, and capacity, fostering a more competitive and accessible global aviation market. The U.S. currently has such agreements with more than 130 countries, including the European Union, Japan, and Australia.
Southwest’s recent filing with the DOT seeks pre-approval to operate flights to all Open Skies partner nations. This would streamline the airline’s ability to launch new routes without requiring individual approvals for each destination. If granted, it would enable Southwest to respond more flexibly to market demand and competitive pressures.
Additionally, the airline requested permission to carry passengers, cargo, and mail to future Open Skies countries, ensuring long-term flexibility. While this regulatory move does not guarantee immediate route launches, it positions Southwest to act quickly when the time is right.
The timing of this filing coincides with a broader transformation at Southwest. Facing pressure from activist investors and a saturated domestic market, the airline is exploring new revenue streams. Expanding internationally offers access to higher-yielding routes and geographic diversification, key advantages in a volatile economic environment.
Southwest’s international strategy has so far been conservative, limited to destinations reachable by its Boeing 737 aircraft. However, with the 737 MAX 8’s extended range of over 4,000 miles, new markets in Europe and parts of South America are within reach. This opens the door to transatlantic flights such as New York to Dublin or Boston to London. Moreover, the airline’s recent partnership with Icelandair marks its first step toward building a network that extends beyond its own aircraft. Through interline agreements, Southwest can offer customers access to destinations it cannot currently serve directly, enhancing its global appeal without deviating from its single-fleet model.
“We are moving quickly to implement changes…to usher in a new era of profitability and industry leadership.”, Bob Jordan, CEO, Southwest Airlines Southwest’s fleet strategy has long been a cornerstone of its operational efficiency. The airline operates an all-Boeing 737 fleet, which simplifies maintenance and crew training. However, this model limits the airline’s ability to serve long-haul international routes, especially in Asia and the South Pacific.
To overcome these limitations, Southwest is expected to rely heavily on partnerships. The interline agreement with Icelandair allows customers to book connecting flights through Iceland, effectively extending Southwest’s reach into Europe. Similar partnerships with carriers in Asia or South America could further enhance its global network without requiring a fleet overhaul.
Another consideration is airport infrastructure. Southwest’s home base, Dallas Love Field, is constrained by a 20-gate cap, limiting its capacity for international operations. As a result, the airline is exploring options at Dallas/Fort Worth International Airport (DFW), which offers the infrastructure needed for expanded international service. This dual-hub approach could mirror strategies used by other major carriers, such as Delta’s use of both LaGuardia and JFK in New York.
Southwest’s move toward international expansion is also a response to financial pressures. In 2024, the airline reported a net income of $465 million on revenues of $27.5 billion, a margin significantly lower than in previous years. Shareholder dissatisfaction, particularly from Elliott Investment Management, has prompted leadership to explore new avenues for growth.
The airline has already announced several changes to its long-standing policies, including the introduction of checked bag fees and plans for assigned seating. These moves, along with the potential for international growth, are aimed at boosting profitability and addressing investor concerns.
Southwest’s $750 million share repurchase program and $2.5 billion transformation plan underscore its commitment to strategic reinvention. International expansion, if executed successfully, could play a central role in achieving these financial objectives.
Despite the potential benefits, Southwest’s international aspirations are not without risks. Operating in foreign markets introduces complexities related to crew scheduling, maintenance, regulatory compliance, and customer service. The airline’s point-to-point model, optimized for short-haul domestic flights, may not translate seamlessly to longer international routes. There are also competitive challenges to consider. In Europe, Southwest would face established players like Ryanair, easyJet, and legacy carriers operating under joint ventures. In Asia, limited range and regulatory barriers could hinder expansion unless strategic partnerships are formed.
Industry analysts are cautiously optimistic. Deutsche Bank’s Michael Linenberg estimates that international operations could improve Southwest’s margins by 2–3 percentage points by 2030. However, he also warns that the airline’s historical aversion to complexity could pose integration risks, especially in managing partnerships and navigating foreign regulations.
“Southwest’s historical aversion to complexity poses integration risks, particularly in managing partnerships and foreign regulations.”, Michael Linenberg, Deutsche Bank Southwest Airlines’ decision to seek expanded international flying rights marks a turning point in its strategic evolution. The move reflects both external pressures and internal ambitions, signaling a willingness to adapt its business model to meet changing market dynamics. While the path forward is fraught with challenges, the potential rewards, increased revenue, global brand presence, and competitive positioning, are significant.
As the airline navigates regulatory approvals, fleet limitations, and partnership opportunities, its success will depend on maintaining the core values that have defined it for over five decades: affordability, reliability, and customer service. If Southwest can balance these principles with the demands of international operations, it may well redefine what it means to be a low-cost carrier in the global aviation market.
What is an Open Skies agreement? Which countries could Southwest fly to under this agreement? Will Southwest change its fleet to support international flights?
Southwest Airlines Eyes Global Expansion Under Open Skies Agreements
The Open Skies Framework: A Gateway to Global Operations
Strategic Timing and Market Opportunity
Operational and Strategic Considerations
Financial Implications and Shareholder Influence
Risks, Challenges, and Industry Reactions
Conclusion: A New Chapter for Southwest Airlines
FAQ
Open Skies agreements are treaties that allow airlines from participating countries to operate freely between each other’s territories without government interference in pricing, routes, or capacity.
The U.S. has Open Skies agreements with over 130 countries, including those in Europe, Latin America, Asia, and Africa. Southwest could potentially serve any of these markets if its filing is approved.
Not immediately. The airline plans to use its existing Boeing 737 MAX 8 aircraft and expand its reach through partnerships with other carriers like Icelandair.
Sources
Photo Credit: Southwest
Airlines Strategy
American Airlines Ends Mileage Earning on Basic Economy Fares
American Airlines stops awarding miles and Loyalty Points on Basic Economy fares purchased after December 17, 2025, aligning with Delta’s policy.
This article summarizes reporting by NBC DFW.
American Airlines has quietly updated its loyalty program terms to remove all mileage and status earning capabilities from its lowest-priced tickets. As of this week, travelers purchasing Basic Economy fares will no longer accrue AAdvantage® miles or Loyalty Points, marking a significant shift in the carrier’s approach to budget-conscious flyers.
According to reporting by NBC DFW, the policy change took effect for tickets purchased on or after December 17, 2025. The move aligns American Airlines more closely with Delta Air Lines, which also restricts earnings on its most restrictive fares, effectively creating a “pay-to-play” environment for travelers seeking elite status.
The update was not accompanied by a formal press release but appeared as a revision to the “Basic Economy” section of the airline’s official website. This “stealth” implementation has drawn attention from frequent flyers and industry analysts who view it as a strategy to further segment customers based on their willingness to pay for premium attributes.
Under the previous structure, Basic Economy passengers earned 2 miles and Loyalty Points per dollar spent, a rate that was already reduced by 60% compared to standard Main Cabin fares. The new policy eliminates this earning potential entirely.
The revised terms apply specifically to the date of purchase rather than the date of travel. According to the updated terms on AA.com:
While the ability to earn status has been removed, American Airlines has retained certain amenities that distinguish its Basic Economy product from ultra-low-cost carriers. Passengers traveling on these fares are still permitted one free carry-on bag and one personal item. Additionally, standard in-flight perks such as complimentary snacks, soft drinks, and entertainment remain included.
Travelers who already hold elite status will continue to receive their applicable benefits, such as priority boarding and upgrades, when flying Basic Economy, even though the flight itself will not contribute to retaining that status for the following year.
This policy update places American Airlines in direct alignment with Delta Air Lines regarding loyalty earnings on basic fares, while widening the gap with other competitors. Delta Air Lines currently awards zero miles or status credit for Basic Economy tickets. By matching this restriction, American has effectively standardized the “no-earn” model among two of the “Big Three” legacy carriers.
United Airlines takes a different approach. United allows Basic Economy passengers to earn Premier Qualifying Points (revenue-based credit) but does not award Premier Qualifying Flights (segment counts). However, United is significantly more restrictive regarding baggage, prohibiting full-sized carry-on bags for non-elite Basic Economy passengers on domestic routes.
In contrast, carriers like Southwest, Alaska Airlines, and JetBlue continue to offer loyalty incentives on their lowest fares, though often at reduced rates compared to standard tickets.
We view this move as a calculated effort by American Airlines to force a clearer choice upon the consumer: pay a premium for the possibility of status, or accept a purely transactional relationship with the airline.
By removing the trickle of Loyalty Points previously available on Basic Economy, American is signaling that its elite ecosystem is reserved exclusively for higher-yield customers. For a traveler spending $100 on a ticket, the loss of ~200 redeemable miles is negligible in terms of redemption value. However, the inability to earn Loyalty Points is a major blow to “status chasers” who rely on segment volume and cheap fares to reach tiers like AAdvantage Gold or Platinum.
Furthermore, the retention of the free carry-on bag suggests that American is wary of ceding too much ground to Spirit and Frontier. While they are willing to cut loyalty costs, they appear unwilling to adopt United’s strict baggage ban, likely to avoid alienating the general leisure traveler who prioritizes luggage space over frequent flyer miles.
If I bought my ticket last week but fly next month, do I earn miles? Does this affect Main Cabin tickets? Can I still bring a carry-on bag?
American Airlines Eliminates Mileage Earning on Basic Economy Fares
Details of the New Earning Policy
Key Changes and Effective Dates
Remaining Benefits
Industry Context: The Race to the Bottom?
AirPro News Analysis
Frequently Asked Questions
Yes. If your ticket was purchased before December 17, 2025, you will earn miles and points under the old policy (2 per dollar).
No. Standard Main Cabin fares and higher continue to earn miles and Loyalty Points at the standard rates (starting at 5 per dollar for general members).
Yes. American Airlines has not changed its baggage policy for Basic Economy. You are allowed one free carry-on bag and one personal item.
Sources
Photo Credit: American Airlines
Airlines Strategy
Kenya Airways Plans Secondary Hub in Accra with Project Kifaru
Kenya Airways advances plans for a secondary hub at Accra’s Kotoka Airport, leveraging partnerships and regional aircraft to boost intra-African connectivity.
This article summarizes reporting by AFRAA and official statements from Kenya Airways.
Kenya Airways (KQ) is moving forward with strategic plans to establish a secondary operational hub at Kotoka International Airport (ACC) in Accra, Ghana. According to reporting by the African Airlines Association (AFRAA) and recent company statements, this initiative represents a critical pillar of “Project Kifaru,” the airlines‘s three-year recovery and growth roadmap.
The proposed expansion aims to deepen intra-African connectivity by positioning Accra as a pivotal node for West African operations. Rather than launching a wholly-owned subsidiary, a model that requires heavy capital expenditure, Kenya Airways intends to utilize a partnership-driven approach, leveraging existing relationships with regional carriers to feed long-haul networks.
While the Kenyan government formally requested permission for the hub in May 2025, Kenya Airways CEO Allan Kilavuka confirmed in December 2025 that the plan remains under active study. A final decision on the full execution of the project is expected in 2026.
The core of the Accra strategy involves basing aircraft directly in West Africa to serve high-demand regional routes. According to details emerging from the planning phase, Kenya Airways intends to deploy three Embraer E190-E1 aircraft to Kotoka International Airport. These aircraft will facilitate regional connections, feeding passengers into the carrier’s long-haul network and supporting the logistics needs of the region.
This operational shift marks a departure from the traditional “hub-and-spoke” model centered exclusively on Nairobi. By establishing a presence in Ghana, KQ aims to capture traffic in a market currently dominated by competitors such as Ethiopian Airlines (via its ASKY partner in Lomé) and Air Côte d’Ivoire.
A key component of this strategy is the airline’s collaboration with Ghana-based Africa World Airlines (AWA). Kenya Airways signed a codeshare agreement with AWA in May 2022. This partnership allows KQ to connect passengers from its Nairobi-Accra service to AWA’s domestic and regional network, covering destinations like Kumasi, Takoradi, Lagos, and Abuja.
Industry observers note that this “capital-light” model reduces the financial risks associated with starting a new airline from scratch. Instead of competing directly on every thin route, KQ can rely on AWA to provide feed traffic while focusing its own metal on key trunk routes. The push for a West African hub comes as Kenya Airways navigates a complex financial recovery. The airline reported a significant milestone in the 2024 full financial year, posting an operating profit of Ksh 10.5 billion and a net profit of Ksh 5.4 billion, its first profit in 11 years. This resurgence provided the initial confidence to pursue the growth phase of Project Kifaru.
However, the first half of 2025 presented renewed challenges. The airline reported a Ksh 12.2 billion loss for the period, attributed largely to currency volatility and the grounding of its Boeing 787 fleet due to global spare parts shortages. These financial realities underscore the necessity of the proposed low-capital expansion model in Accra.
The strategy focuses on collaboration with existing African carriers rather than creating a new airline from scratch.
, Summary of Kenya Airways’ strategic approach
The viability of the Accra hub relies heavily on the Single African Air Transport Market (SAATM) and “Fifth Freedom” rights, which allow an airline to fly between two foreign countries. West Africa has been a leader in implementing these protocols, making Accra a legally feasible location for a secondary hub.
Furthermore, the African Continental Free Trade Area (AfCFTA) secretariat is headquartered in Accra. Kenya Airways is positioning itself to support the trade bloc by facilitating the movement of people and cargo between East and West Africa. The airline has already introduced Boeing 737-800 freighters to serve key destinations including Lagos, Dakar, Freetown, and Monrovia.
The decision to delay a final “go/no-go” confirmation until 2026 suggests a prudent approach by Kenya Airways management. While the West African market is lucrative, it is also saturated with aggressive competitors like Air Peace and the well-entrenched ASKY/Ethiopian Airlines alliance. By opting for a partnership model with Africa World Airlines rather than a full subsidiary, KQ avoids the “cash burn” trap that led to the collapse of previous pan-African airline ventures. If successful, this could serve as a blueprint for other mid-sized African carriers looking to expand without overleveraging their balance sheets.
What aircraft will be based in Accra? When will the hub become operational? How does this affect the Nairobi hub?
Kenya Airways Advances Plans for Secondary Hub in Accra Under ‘Project Kifaru’
Operational Strategy: The ‘Mini-Hub’ Model
Partnership with Africa World Airlines
Financial Context and ‘Project Kifaru’
Regulatory Landscape and Competition
AirPro News Analysis
Frequently Asked Questions
Current plans indicate that Kenya Airways intends to base three Embraer E190-E1 aircraft at Kotoka International Airport.
While planning is underway and government requests have been filed, a final decision on full execution is not expected until 2026.
Nairobi (Jomo Kenyatta International Airport) remains the primary hub. The Accra facility is designed as a secondary node to improve regional connectivity and feed traffic back into the global network.
Sources
Photo Credit: Embraer – E190
Airlines Strategy
TUI Airline Launches Navitaire Stratos for Modern Airline Retailing
TUI Airline adopts Navitaire Stratos, a cloud-native platform with AI-driven offer and order retailing to enhance booking and operational capabilities.
This article is based on an official press release from Amadeus.
In a significant move toward modernizing digital travel infrastructure, TUI Airline has been announced as the launch customer for Navitaire Stratos, a next-generation airline retailing platform. According to an official press release from Amadeus, the parent company of Navitaire, this partnership marks a transition from the legacy “New Skies” system to a cloud-native, AI-driven environment designed to facilitate “Offer and Order” management.
The collaboration aims to overhaul TUI’s digital capabilities, moving the leisure carrier away from rigid, traditional ticketing systems toward a flexible, e-commerce model comparable to major online retailers. By adopting Stratos, TUI Airline intends to enhance its ability to sell personalized travel bundles, manage complex itineraries, and integrate third-party ancillaries directly into the booking flow.
The aviation industry is currently undergoing a technological paradigm shift known as “Offer and Order” management (OOMS). Traditionally, airlines have relied on Passenger Service Systems (PSS) that separate schedules, fares, and ticketing into distinct, often disjointed, databases. This legacy architecture can make modifying bookings, such as adding a hotel room or changing a flight leg, technically complex.
Navitaire Stratos is designed to replace these silos with a unified system. According to the announcement, the platform utilizes open architecture and artificial intelligence to generate dynamic offers. This allows the airline to present a single, comprehensive “order” that includes flights, accommodation, and activities, rather than a collection of disparate tickets and reservation numbers.
One of the standout features of the Stratos platform, as highlighted in the release, is the introduction of shopping cart functionality. While standard in general e-commerce, the ability to add items to a cart, save the session, and return later to complete the purchase is relatively rare in airline booking engines due to the volatility of ticket pricing and inventory.
TUI Airline plans to leverage this feature to reduce friction for leisure travelers. The new system will allow customers to build complex holiday packages over time, saving their progress as they coordinate with family members or travel companions. The platform is also designed to support intelligent upselling, offering relevant add-ons such as baggage upgrades, meals, or car rentals based on specific customer data.
TUI Airline, which operates a fleet of over 130 aircraft including Boeing 737 MAX and 787 Dreamliner jets, has maintained a partnership with Navitaire for over two decades. This new agreement represents a deepening of that relationship rather than a new vendor selection. The transition to Stratos is positioned as a critical step in TUI’s digital transformation strategy. Peter Glade, Chief Commercial Officer at TUI Airline, emphasized the importance of this technological upgrade in the company’s official statement:
“We are on a journey to build the most modern airline commercial set up in the industry. Navitaire Stratos will be a cornerstone of this transformation… It will elevate our retailing capabilities with intelligent recommendations, dynamic offers, and a shopping cart that makes it easy for customers to convert their selections into an order or save them for later.”
Amadeus views this launch as a benchmark for the broader low-cost and hybrid carrier market. Cyril Tetaz, Executive Vice President of Airline Solutions at Amadeus, noted the long-term implications of the project:
“As the group transitions from our New Skies solution, close collaboration on a shared long-term roadmap will ensure business continuity, while helping shape the next-generation Offer and Order solution of reference for low-cost and hybrid carriers.”
While legacy network carriers often focus on corporate contracts and frequency, leisure carriers like TUI are uniquely positioned to benefit from the “Offer and Order” revolution. Leisure travel is inherently more complex than point-to-point business travel; it often involves multiple passengers, heavy baggage requirements, and the need for ground transportation or accommodation.
By moving to a cloud-native platform like Stratos, TUI is effectively acknowledging that it is no longer just a transportation provider, but a digital travel retailer. The ability to “save for later” is particularly potent for the leisure market, where the booking window is longer and purchase decisions are often collaborative. If TUI can successfully implement a “shopping cart” experience that mimics Amazon or Uber, they may significantly increase their “share of wallet” by capturing ancillary spend that might otherwise go to third-party aggregators.
Beyond retailing, the shift to cloud-native infrastructure offers operational benefits. Legacy PSS platforms are notoriously difficult to update and maintain. A cloud-based system allows for faster deployment of new features and greater resilience during peak traffic periods, critical factors for a holiday airline that experiences extreme seasonal demand spikes.
TUI Airline Selected as Launch Customer for Navitaire Stratos Retailing Platform
The Shift to “Offer and Order” Management
The “Amazon-ification” of Booking
Strategic Partnership and Executive Commentary
AirPro News Analysis
Why Leisure Carriers Lead the Retail Revolution
Operational Resilience
Sources
Photo Credit: Amadeus
-
Commercial Aviation7 days agoVietnam Grounds 28 Aircraft Amid Pratt & Whitney Engine Shortage
-
Business Aviation3 days agoGreg Biffle and Family Die in North Carolina Plane Crash
-
Business Aviation2 days agoBombardier Global 8000 Gains FAA Certification as Fastest Business Jet
-
Defense & Military5 days agoFinland Unveils First F-35A Lightning II under HX Fighter Program
-
Technology & Innovation24 hours agoJoby Aviation and Metropolis Develop 25 US Vertiports for eVTOL Launch