Southwest Airlines has struck a partnership with ‘buy now, pay later’ (BNPL) provider Uplift, a company that focuses on point-of-sale financing for travel. Uplift works with more than 100 travel companies, including United Airlines, Alaska Airlines, Spirit, and Lufthansa.

Why should we care?
‘Buy now, pay later’ tools have grown in adoption during the pandemic. Recent research suggests BNPL adoption grew more than 50% over the past year. With travel slowly returning, Southwest is betting that BNPL will be an added incentive. For its part, Uplift said it’s seeing strong “pent-up consumer demand for travel as COVID-19 case counts decline and vaccinations ramp up.” Banks are also getting into BNPL as a travel financing vehicle, with Marcus by Goldman Sachs recently partnering with JetBlue on travel financing options. Meanwhile, Vrbo and Expedia have partnered with BNPL company Affirm to facilitate vacation financing. While some may be optimistic about the imminent return of travel, others suggest travel may take years to recover. American Express CEO Stephen Squeri last week said that though there were month-on-month increases in spending on flights and restaurant meals domestically, it could take a couple of years before travel returns to pre-Covid rates of activity. This is because some countries still face Covid-19 surges, and many cross-border restrictions are still in place. As a result, corporate travel has yet to fully pick up, and many companies are still operating through remote work formats. “Even if domestic travel recovers, it is the international travel tickets that bring in the big bucks in terms of profit margins,” he said on a recent earnings call.