Southwest Airlines has nearly expanded to every conceivable airport in the U.S., outside of Hawaii and Alaska. So where will it go next?
In presentation earlier this month, Southwest CFO Tammy Romo said airline is continuing to look south, beyond the current international markets (listed on the map below) that Southwest already serves. Cuba is, of course, the next country Southwest is seeking to add, but Romo hinted that other destinations might be possible, too.
"We've identified approximately 50 potential dots on the map, and I'll just draw your attention to the map here within the range of the mission of our current fleet which is the red circle," Romo told investors, according to the transcript on Southwest's website. "Most of these new cities are outside the Continental United States."
An analyst asked whether Southwest is actually considering South America, and Romo said it is.
"If you look at where the 737 can fly, that really can take you to the northern part of South America," she said. "And so when you look out within that circle, there are a lot of possibilities. ... So, we've got a lot of headroom here just flying the 737."
Romo downplayed the issue, but there is one potential problem with Southwest's short-term international plans. The airline does not have the most efficient reservations system for international itineraries. You may not notice it, but Southwest has two distinct reservations system - one for domestic flights and the other for international ones. The international system is state-of-the-art, but in 2015, the Dallas Morning News called the other one, "ancient."
By next year, Southwest says it will be operating on only one modern system, which should make it easier for the airline to sell complicated itineraries. It also should lead to more airline profits, but that's a post for another day.
"Merging onto one system will serve to reduce inefficiency which are inherent in operating multiple reservation systems," Romo told analysts. "Once implemented, we believe we will have a state of the art reservation system and that has the opportunity to provide hundreds of millions in incremental revenue opportunities."
Where do you think Southwest should expand next?