Icelandair, Southwest to Launch Partnership in 2025

Pittsburgh International Airport’s largest airline is partnering with its newest European carrier.

On Thursday, Southwest Airlines and Icelandair announced they had signed a Memorandum of Understanding (MOU) that will initiate a bilateral partnership between both airlines. The partnership, expected to begin in 2025, will allow travelers to seamlessly connect between both airlines’ networks in the U.S. and Europe.

The partnership comes after Southwest announced that it will begin partnering with international carriers – a new strategy implemented by the airline – to expand its network and allow its travelers to reach more global destinations, generating more travel demand.

Icelandair will become Southwest’s first interline carrier in over a decade after its partnership with Mexico-based Volaris ended in 2013. Southwest said it plans to add an additional interline agreement with another airline sometime next year.

“Icelandair will become our initial partner through a shared focus on warm hospitality and value in air travel that both carriers strive to offer, enabling Southwest to further our global reach beyond the nearly 120 destinations we serve in North America,” said Ryan Green, Southwest’s Executive Vice President, Commercial Transformation. “We’re grateful for the mutual confidence and enthusiasm that’s built a bridge between our two great airlines and aims to serve our customers and those of Icelandair on both sides of the Atlantic.”

Southwest becomes Icelandair’s third major U.S. carrier partnership – it has codeshare agreements with Alaska Airlines and JetBlue – and joins the more than 70 total partner carriers within Icelandair’s interline network.

“We are very excited to add Southwest to our impressive partnership portfolio and are honored to be chosen as their initial airline partner,” Icelandair CEO Bogi Nils Bogason said in a statement. “The partnership will unlock many exciting travel options for our customers, and our extensive network in Europe will open for Southwest customers.”

The partnership will extend Icelandair’s market reach into the U.S. and strengthen its comprehensive route network in North America, a region Icelandair continues to focus on growing. Icelandair currently operates 18 destinations in North America and 34 destinations throughout Europe.

Baltimore will become the first U.S. gateway for the Icelandair-Southwest partnership starting next year. More cities will be added to the two airlines’ partnership in the future.

PIT is one of a handful of U.S. airports where Southwest and Icelandair both operate. Southwest is PIT’s largest airline by passengers flown and currently flies to 18 nonstop destinations, the most of any carrier at the airport. Icelandair, which began service at PIT in May, operates nonstop seasonal service to Reykjavik four times a week through late October.

Southwest is one of PIT’s fastest-growing airlines and continues to be the airport’s leading market carrier, flying over 23 percent of total passengers in August. In recent months, Southwest has added more flights to destinations such as Austin, launched seasonal nonstop service to San Diego in June, and will resume nonstop flights to Miami in January.

RELATED: Icelandair Expands Season on Pittsburgh-Reykjavik Route

Icelandair is also increasing its service at PIT when it resumes its seasonal Reykjavik flight in 2025. The airline announced last week that it will resume the Pittsburgh-Reykjavik route nearly a month earlier than its initial May launch date with flights returning April 17. The route has quickly become popular with travelers taking advantage of its direct access to Iceland’s tourism market and seamless connections to over 25 destinations in Europe via Icelandair’s Reykjavik hub.

Bags to Still Fly Free

In an effort to boost profitability and adjust to market dynamics, Southwest is making major changes to its product and customer experience. One thing that Southwest is not changing, however, is its popular “bags fly free” policy.

In its transformation plan released at the airline’s Investor Day event Thursday, Southwest revealed that it will keep its policy of two free checked bags for all customers that has long made the airline unique versus other competitors.

Southwest said its research concluded that its bags fly free policy remains the most important feature that differentiates the airline from its competitors.

“The company believes that any change in the current policy that provides every customer two free checked bags would drive down demand and far outweigh any revenue gains created by imposing and collecting bag fees,” the airline said.

Southwest confirmed its previously announced transition away from its longstanding open seating policy to assigned seating, which it expects to begin selling in the second half of 2025. Southwest expects flights to operate its first flights with assigned seating in the first half of 2026.

RELATED: Southwest Announces Move to Assigned Seating

To make way for its new seating policy, Southwest will alter its boarding process to accommodate assigned seating and better efficiency but will maintain its unique position numbers and signage in gate areas. It will also keep priority boarding for its frequent flier program members and customers booked in premium seating.

Southwest also shared new information regarding its incoming premium seating, which it expects to increase demand and generate more revenue per passenger. Southwest will offer extra legroom options with up to five additional inches of pitch for approximately a third of its seats while maintaining standard economy seat pitch across its fleet of aircraft.

Additionally, in 2025 Southwest will introduce Gateways by Southwest, the airline’s new bundle that will offer vacation packages aligned with Southwest’s existing no change and cancellation fees for flights.

Southwest will also continue to add more red-eye flights to increase aircraft utilization, which the airline still plans to begin in February 2025. It will also aim to further reduce turn times for aircraft in between flights to increase operational efficiencies.

Southwest is also in the process of retrofitting its Boeing 737-800 and 737 MAX 8 aircraft with larger overhead bins and USB-A and USB-C power ports in every seat to charge personal electronic devices. It is also debuting its new cabin in 2025 featuring a redesigned interior and new RECARO seats with personal device holders and enhancements for better seat comfort.