Uplift, a buy now, pay later (BNPL) company that specializes in travel, has added Southwest Airlines to its client list. The two companies are partnering just as summer travel is expected to pick up, thanks to the roll-out of vaccines aimed at curbing the COVID-19 pandemic.

With Uplift's new BNPL tie to Southwest, consumers can use the payments service to buy tickets to fly the airline and pay for them in installments over time. It also allows Sunnyvale, California-based Uplift to add a major carrier to its portfolio of 15 other airline clients, which include United Airlines, Lufthansa and Alaska Airlines. 

Greater flexibility in payment options may encourage consumers who are put off by the sometimes substantial expense of air travel, Uplift CEO Brian Barth said.  "When you can break [a purchase] up into eleven or twelve payments, then it becomes 'oh yeah, I can do that,'" he said.

"Enabling flexibility for our customers is extremely important to Southwest Airlines, making Uplift a great partner to help support our business objectives," Jonathan Clarkson, Southwest's managing director of loyalty partnerships and products, said in an email. Southwest Airlines was ranked in 2019 as the sixth-largest airline based on passenger traffic measured in kilometers flown, according to the International Air Transport Association.

Uplift's relationship with Southwest started originally in 2017 as a marketing tie-in to Southwest Vacations, a vacation package provider for the carrier operated by ALG Vacations Corp. The partnership lets users purchase Southwest Vacations packages on its site for monthly payments. 

In 2019, Uplift also entered its exclusive partnership with the Universal Air Travel Plan (UATP), a payments company owned by several airlines, including Southwest. Uplift powered the BNPL system for UATP offerings as well.

The new twist now for Southwest and Uplift is a direct branding link between the two that could increase customer demand for both. 

The new link comes at a crucial time, when travel companies are hoping for a recovery of demand. After the COVID-19 pandemic emerged, U.S. travel spending plunged nearly 42% in 2020, to $500 billion dollars last year compared $679 billion in 2019, according to the U.S. Travel Association. The pandemic depressed travel as consumers stayed home, in some cases due to state government lockdowns that imposed travel restrictions. 

Southwest is seeking ways to bounce back from the impact of the pandemic. In January, the Dallas-based carrier reported a $3.1 billion dollar net loss for last year, its first annual net loss since 1972. But last month, Southwest reported a first-quarter profit, thanks partly to federal government pandemic aid. 

"While the pandemic is not over, we believe the worst is behind us, in terms of the severity of the negative impact on travel demand," Southwest CEO Gary Kelly said in the April 22 press release announcing the latest financial results. "Vaccinations are on the rise, and COVID-19 hospitalizations in the United States are down significantly from their peak in January 2021. As a result, we are experiencing steady weekly improvements in domestic leisure bookings, which began in mid-February 2021."

Uplift says its service makes travel more affordable because it lets consumers pay in smaller installments, as opposed to a flat rate all at once. Still, it could make the overall price higher when including fees. Uplift generates revenue by charging the airlines an "interchange," or "merchant, fee and also by charging the consumer a fee. 

Founded in 2014, Uplift also offers its services in conjunction with cruise lines and resorts. Barth said the company expects to expand into other areas outside of travel and leisure within the next one to two months, but he declined to say which industries. 

Uplift faces competition in the BNPL travel space too. The rival Fly Now Pay Later announced today that it has raised an additional $14 million in venture funding to launch U.S. operations and expand its European offering. 

In the fourth quarter of 2020, Uplift generated 72% growth in monthly transaction revenue, according to a February press release. Uplift declined to comment on their current revenue.