Southwest's Aileen Furlong discusses:
- Joining the carrier amid its unprecedented change
- The carrier's investigation of NDC
- Corporate contracting in a turbulent market
Former United Airlines sales executive Aileen Furlong joined Southwest Airlines in early January as its VP of sales, a position that includes oversight of Southwest Business. In mid-May, Furlong talked with BTN senior transportation editor Donna M. Airoldi about her new role, New Distribution Capability, corporate booking trends and the effect of upcoming changes like assigned seating and extra legroom on corporate contracting. Edited excerpts follow.
BTN: How are you making the new role your own?
Aileen Furlong: I started just over four months [ago], so it is all very, very new within the context of a lot of change. … One of the things that drew me to Southwest was, [it's a] really iconic brand that's known for its people, known for its hospitality, all these wonderful aspects of service, which I have now come to fully appreciate since being here. It's very authentic, it's very genuine and real. And very specifically, as I was looking at this role, the account team at Southwest was recognized by BTN [in BTN's 2024 Airline Survey and Report] as having one of the top account management teams. And I continue to think that that really sets us apart. There was a wonderful foundation built by this entire team, and in general, Southwest is still relatively new compared to others to the corporate travel sector. So, I feel like I'm coming in on really solid footing and very excited to take it to the next level. …
I would say the biggest thing is it's been really fast, a little bit of a whirlwind. And the time that I am coming in is one where it's the biggest transformation in this company's history. There's a lot that comes with that. First and foremost, it was taking a step back and looking at Southwest Business and thinking about how [it] needed to evolve in the context of this broader transformation. How do we continue at Southwest Business to grow business travel, grow that revenue? That's really, really been clear. But how we do that for customers is more where I've been focused on or where I see some changes for Southwest Business.
I'd say overall we're focused as a company, but certainly within Southwest Business, around creating more efficiencies for customers, continuing to modernize our tools and delivering improved customer experiences. … Some of the places you'll see that be visible, for example, is in our approach to distribution.
BTN: Your colleague Rob Brown previously mentioned that Southwest would investigate offering New Distribution Capability content. How is that coming along?
Furlong: We've been very committed and remain committed to being a channel of choice, but as we looked at the transformation and looked at the technology that we needed in order to be where our customers want to book, want to shop, want to service, we realized there was an opportunity to continue to modernize all of our channels. That that has been a focus for us, making sure that our direct channels and our APIs and our [global distribution system] connections are all ready for the future and can support all of the new products and services that are being offered through the Southwest transformation. … To be crystal clear, that's for all customers in all of our distribution channels.
And NDC is a big part of that strategy. I would describe the broader transformation as a bit of a catalyst for accelerating our investment in NDC, but we're evolving all of our channels, and that includes the GDS. I'm viewing the NDC enablement as an enablement for Southwest Business. We're not viewing it as a tool to differentiate content between channels or take away content. It's really more about bringing personalization and our new ancillary suites, our new fare products to life.
Southwest has been a long-term leader in our direct-connect capabilities, and we feel like adding the NDC standards to those, to our current API, will allow us to enhance it in a more industry-standard way. Think of things like seat selection and our fare products and being able to expand our channel partner portfolio more broadly. Nothing really specific to share in terms of exact timeline when we're going to market and when we'll have each and every channel ready. But what I can tell you is all of that is under very active exploration right now, and I can confirm it is a top priority for us this year.
BTN: How are the new fare products, assigned seating and extra legroom seats affecting corporate contract negotiations?
Furlong: The way that we are talking with corporate travel managers and talking with customers and [travel management companies], there's a big focus and emphasis around how we think about contracting differently. We will soon have much more differentiated fare products than ever before. I think the conversation is really interesting with the corporate travel management area right now because a lot of what Southwest had was a one-size-fits-all model. Now with bigger differences, bigger choices, more segmentation, we can zero in on a conversation around what really meets the needs for your travel program. And we know our customers have varying needs. So how we bring those new fare products into our contracting is also a big focus for us. And you asked about how I'm putting my stamp on it.
I started at United 25 years ago. But my background is all in commercial, and I started in network planning straight out of business school, and over time I gravitated more and more to customer-oriented roles. I spent a lot of time in marketing, in loyalty, customer experience, sales. And when I first joined sales at United, I led leisure sales and specialty sales, business development inside sales. It was global accounts. And one of the things I think coming to Southwest is I bring this really unique combination of a B-to-C and a B-to-B background, which I love, and I'm passionate about because I love bringing the voice of the customer into the business. That certainly was my experience in marketing and loyalty, making sure that products and services worked well for travelers, and the same applied within all of my sales experience.
It's a really exciting moment in time for me personally because this moment of transformation at Southwest, it's appealing. We're bringing these products and services into the marketplace that haven't existed in our travel experience before. And in many ways, it's actually breaking down a lot of barriers. [Travel managers] have told us they've wanted it in their program for a long time, the assigned seating and extra-legroom seating. So, I look to my background where I have this passion for building and growing things, and I've taken very similar experiences with ancillary products in the past and built them into tier benefits or credit card benefits and into tailoring corporate agreements. That's the moment for us right now at Southwest, to have a more customized conversation about programs [and] how what we offer now meets the needs of their programs.
BTN: How did the recent layoffs affect the corporate sales team?
Furlong: As we looked at the layoffs, making sure that we did not lose any of our focus on customers was a huge priority for us. There were a few account managers that were impacted. … The great thing is we have a team selling approach. So, even in a place where there may have [been] a change in leadership, for example, or a leader was impacted, you had other team members who were already familiar with the account and supporting the account. I'd say because of Southwest's strong team-based approach to selling, while we did have to make some adjustments, it was not a whole scale change across the board for most customers at all.
BTN: On the company's first-quarter earnings call, executives said that corporate bookings were a little softer leading into quarter two. Has that stabilized?
Furlong: The big word is uncertainty, and that's definitely a word that we continue to hear when we speak to our customers. Andrew [Watterson], our COO, described it as soft, but stable, and we have not seen much change since our Q1 financials. If you look at the business travel sector as a whole, even in Q1, there was actually an increase in business travel if you exclude what we saw in terms of government or higher ed, some of the research grants. … It's sort of slowed. It hasn't changed. It's soft, but stable, still seems like the best description that I would give it. We're not seeing dramatic decreases in corporate travel, but people are very, very sensitive to what's going on more broadly in the economy.
BTN: How exposed are you to government business, and how are those layoffs affecting that particular segment?
Furlong: I would characterize [it as] low single digits of our managed travel or our managed business program as government exposure, if that makes sense.
BTN: What trends are you seeing in the corporate market right now overall?
Furlong: Much of it is focused on products and services. … We're having a lot more conversations about loyalty. And if you look at what's actually happened with the fare product evolution and the choices, we're placing a lot of traveler-experience value and other values in our A-List and A-List Preferred programs, and certainly the [credit] cards, but more from a corporate travel perspective, the tier experience. We're having a lot of conversations—not that we didn't in the past—but there certainly is more interest in understanding how we can grow corporate travel and business traveler engagement with the Rapid Rewards program. Is it brand-new? No, but it takes on a greater emphasis within the context of the transformation and some of those changes.
BTN: Are buyers still talking about sustainability?
Furlong: Buyers are talking about it, but it seems to be a bit less and not as front and center as it was during the pandemic.