The Southwest You Grew Up With Is Gone

0:00Thank you.

0:30Sarah Dandashy: First up, Southwest Airlines is getting airport lounges, at least 11 of them, starting in Austin, Baltimore, Nashville, and Honolulu, launching in late 2027 in partnership with JPMorgan Chase. And by the way, there's also a new co-branded credit card that comes with it. Two years ago, this would have been unthinkable. Southwest was the airline with no assigned seats, no bag fees, no frills. But now it has all of that, and soon airport lounges. Southwest was the second most profitable U.S. airline last quarter behind Delta. Bag fees alone are on track to generate up to a billion dollars a year.

1:04Sarah Dandashy: Now, their CEO puts it simply, I want to give our customers fewer and fewer reasons to choose United, Delta, or American instead. And by the way, Southwest isn't just changing. It's becoming a completely different airline. Next up, Uber is laying off 3 ,300 employees, about 20 % of its management layer, and pulling focus back to ride-sharing, food delivery, and robo-taxis. Now, for travel, this matters. Uber has been expanding into flights through Hopper, hotels through Expedia, and trains through Omeo. The company says its product lineup isn't changing, though. But when you cut 3 ,300 people and refocus on core businesses, the travel side, which isn't material to Uber's bottom line, is unlikely to get more attention.

1:47Sarah Dandashy: CEO Dara Khosrowshahi wants the company simpler and faster. He's also calling most remote workers back to the office. So in a nutshell, Uber's travel ambitions are taking a backseat, no pun intended, for now. And the autonomous vehicle future is getting the investment. And finally, Emirates just unveiled a premium economy seat with a full-height electric privacy divider, leather headrest, 4K screens, and preset lounge and meal modes on its new Airbus A350s. But here's why this matters. Airlines used to compete by adding seats. Now they're chasing yield. So that's more money from the passengers that they already have.

2:26Sarah Dandashy: Premium economy fares can generate up to three times the revenue of a standard economy seat. Delta, for example, now gets 50 % of its passenger revenue from premium cabins. Business class is now being carved into tiers with stripped-down base fares. And premium economy is moving up to meet it. The airlines that get that middle right are going to win. Well, that's it for your Skiff Daily Briefing. For more industry news, head to skiff.com and subscribe at skiff.com backslash daily. Thanks so much for listening.