Southwest Is Doing What No One Thought It Would. It’s a Master Class in Market Expansion

Southwest experienced explosive growth during 2021, with expansion into 18 new markets and profit in the fourth quarter. Despite the pandemic’s detrimental effect on the travel industry, staff shortages, the emergence of virtual events, and the emergence of stay times, the airline has persisted and done what no one thought the airline could: It grew.

And now Southwest is starting to do what no one thought the low-cost airline would appeal to business travelers.

To anyone familiar with the low-cost carrier, the idea of ​​Southwest looking to attract corporate travelers sounds ludicrous. After all, while the airline has some great perks for the average economy class traveller, none of them have to do with business class travelers whose ticket already comes with free checked bags and the flexibility to cancel or change flights. And let’s not forget the little fact that its planes lack one very big thing: a business class cabin.

But in a strange genius move, Southwest is making so-called tube dreams a reality by making roadmap expansion a core recovery strategy. And while the airline may be seen as deaf to using this time to expand its routes and reach new markets, this is limited only to those who ignore its long-term plan: market expansion.

What Southwest is doing is expanding to smaller, more vacation-friendly destinations that people want to go to, like Telluride, Palm Springs and Southern Maine. But it’s not just about heading to the slopes or relaxing on a warm beach that attracts Southwest commuters.

As more companies switch to remote work entirely and the “big quit” (or better yet, the big change) continues, work isn’t the only thing changing. But where we live is also changing.

The pandemic has created the perfect mix of booming real estate prices. Homes are more important than ever as more people work from home all week and are locked inside all weekend with nowhere to go. High rent and historically low interest rates have made home buying more attractive than ever. And thanks to the permanently remote work trend, people are not buying homes based on proximity to their employer. Instead, go to “vacation friendly” destinations near their favorite pastimes.

What this means for the airline industry is that people are becoming more distracted, and business travelers are no longer tied to cities like New York, Chicago or San Francisco. Now, with more people moving out of the big cities, business travelers are everywhere — like the Southwest.

Southwest has a history of resilience born from a comprehensive approach to strategy and a deep understanding of human psychology. She knows that business travelers don’t simply choose the airlines that offer the best lounge buffet, the most points, or the largest first-class cabins, but also in terms of their value.

And when people value their time, they also value the convenience that an airport provides in their local area and the time returning with their family and friends – their lives. Because no matter how many bells and whistles an airline makes to discourage air travel, people don’t fly for fun. They fly to get where they are going. And to get them there, Southwest is strategically positioning itself to meet people wherever they are.

The aviation industry is fiercely competitive and extremely challenging – but it is no different from a number of other industries. And just like other industries and the companies you start and operate within, the ones that succeed – and even weather the storm – are the ones that truly know their consumer and their value. With this knowledge companies can meet people wherever they are and take them to where they want to be.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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