Bernstein SocGen Group reiterated its Market Perform rating and $45 price target on Southwest Airlines (NYSE: LUV), highlighting concerns about customer sentiment following recent business model changes.
The firm noted that Southwest introduced several significant changes in 2025, including assigned seating, premium-priced extra legroom options, increased fare segmentation, baggage fees, expiration dates on flight credits, and expanded partnerships.
Bernstein said these changes were intended to position Southwest more like a premium carrier comparable to major U.S. airlines such as United Airlines, Delta Air Lines, and American Airlines, though the company still lacks certain features such as lounges, a broad network, and a fully premium in-flight experience.
The analyst added that the shift may have moved Southwest away from its traditional positioning as a higher-end low-cost leisure carrier.
To assess customer reaction, Bernstein conducted a survey of 221 respondents, with findings suggesting that consumers were less enthusiastic about the changes than investors had anticipated.
The results indicated that potential changes in customer demand could offset some of the expected benefits of the new strategy, raising concerns about the company’s outlook.
