Southwest Airlines, a longtime advocate of cost-free baggage services, is set to introduce fees for checked bags, a significant about-turn aimed at boosting revenue. This change, effective for tickets purchased from May 28 onward, marks a departure from Southwest’s long-standing practice, which has been a significant differentiator in the competitive airline industry. The airline, recognized as the largest domestic carrier in the U.S., has traditionally promoted its “two bags fly free” policy. However, under pressure from Elliott Investment Management, which acquired a stake in Southwest last year and secured five seats on its board, these changes are being implemented.
The introduction of baggage fees excludes the highest fare category, while elite frequent flyers with “A-List Preferred” status will continue to enjoy the benefit of checking in two bags for free. Meanwhile, A-List members and Southwest credit card holders will be entitled to one free checked bag. This move aligns Southwest with its competitors, who amassed $5.5 billion from baggage fees last year, according to federal data. CEO Bob Jordan previously emphasized that free checked bags were a key reason customers chose Southwest. Yet, Chief Operating Officer Andrew Watterson explained the shift was due to the need for increased revenue to cover costs, acknowledging that these moves are expected to dampen the shift of customers to other airlines.
Southwest also introduced a basic economy fare, a strategy long employed by competitors. Moreover, Southwest’s frequent flyer program, Rapid Rewards, will now reward passengers with more miles based on the ticket cost, adopting a dynamic pricing model similar to rivals. Additionally, flight credits will have a one-year expiration from the purchase date unless specified otherwise.
This reorientation comes on the heels of other strategic shifts aimed at aligning with industry standards as Southwest’s performance wanes. Last July, the airline ended its open seating policy, moving to assigned seating and adding premium extra legroom options, marking a significant departure from its tradition of single-class cabins. Facing increased post-pandemic expenses, the airline is endeavoring to streamline operations amid a broader cost-cutting initiative.
CEO Bob Jordan described Southwest’s current phase as pivotal, stating the airline is transforming into a “leaner, faster, and more agile organization.” This transformation follows staffing and leadership changes, including its first mass layoff affecting 15% of its corporate workforce, announced last month. Such decisions, according to Jordan, are unprecedented in Southwest’s 53-year history.
Furthermore, the airline’s restructuring efforts saw the replacement of its finance chief, Tammy Romo, and the retirement of Chief Administrative Officer Linda Rutherford earlier this year, both of whom had long tenures at Southwest. The company also plans to curtail unprofitable routes and supplementary services like summer internships and employee team-building activities, cementing its commitment to financial prudence.
As Southwest Airlines navigates these seismic changes, customers may need to reassess the factors that drive their airline preferences. These strategic shifts underscore the airline’s pursuit of sustainability in a challenging economic environment while positioning it competitively within the broader aviation market.
Original Source: https://www.cnbc.com/2025/03/11/southwest-airlines-charge-checked-bags.html
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Publish Date: 2025-03-11 17:17:00
