Southwest Airlines is known for having policies that are good for customers. Soon, they will make big changes that will mark the end of an era. The airline will start charging for checked bags on May 28, 2025. This will end a 54-year practice of letting customers check two bags for free.
Information about the new baggage rules
Most people who fly will have to pay for their first and second checked bags under the new rule. There are, however, some important exceptions:
- Rapid Rewards Preferred Members on the A-List: These very important regular flyers will still get two free checked bags.
- Business Select Fare Passengers: Travelers who purchase Business Select tickets will also retain the perk of two free checked bags.
- Rapid Rewards Credit Card Holders: Customers holding the airline’s co-branded credit card will receive a credit for one checked bag.
For passengers who do not fall into these categories, fees will apply to checked baggage. The specific fee structure has yet to be disclosed by Southwest Airlines.
Introduction of Basic Economy Fare and Assigned Seating
In conjunction with the baggage policy overhaul, Southwest Airlines plans to introduce a new basic economy fare. This fare option will offer assigned seating and the possibility of extra legroom for an additional fee. The move to assigned seating represents a departure from Southwest’s traditional open-seating policy, which has been a hallmark of the airline for over five decades.
Financial Considerations and Investor Influence
The decision to implement baggage fees comes amid financial pressures and the influence of activist investors. In October, Southwest reached an agreement with Elliott Investment Management, a hedge fund that had been advocating for measures to enhance profitability. This agreement averted a potential proxy fight but resulted in Elliott securing several seats on Southwest’s board of directors.
Additionally, Southwest announced the elimination of 1,750 corporate positions, accounting for 15% of its corporate workforce. These layoffs, the first major ones in the company’s 54-year history, are part of a broader strategy to reduce costs and transform the airline into a “leaner, faster, and more agile organization,” according to CEO Bob Jordan.
Market Reaction and Competitive Landscape
Following the announcement of the new baggage fees, Southwest’s stock experienced a notable increase, rising more than 9% on the day of the announcement.
The introduction of baggage fees aligns Southwest with other major U.S. airlines, all of which charge for checked luggage. Previously, Southwest’s free baggage policy was a key differentiator that attracted cost-conscious travelers. The airline had estimated that charging for checked bags could generate approximately $1.5 billion annually but might result in a loss of $1.8 billion in business from customers who chose Southwest specifically for its generous baggage allowance.
Competitors, such as Delta Air Lines, view Southwest’s policy shift as an opportunity to attract customers who may be dissatisfied with the new fees. Delta’s President, Glen Hauenstein, commented that some customers who previously chose Southwest for its free baggage policy might now consider other options.
Customer Reactions and Brand Identity
The response from Southwest’s loyal customer base has been mixed. Many travelers valued the airline’s free baggage policy as a significant benefit and a distinguishing feature in a competitive industry. Some customers have expressed disappointment, feeling that the new fees undermine the airline’s longstanding commitment to customer-friendly practices.
On social media platforms, reactions have been swift and, in many cases, negative. Users have lamented the loss of what they perceived as one of the last remaining perks in air travel and expressed concerns that Southwest is becoming indistinguishable from other carriers that impose numerous fees.
Conclusion
Southwest Airlines’ move to charge for checked bags is a big change in how it does business and how it treats its customers. The move is meant to make the company more profitable and in line with industry standards, but it could turn off some of its loyal customers who liked the airline’s unique services. As the date of May 28 draws near, both the airline and its customers will be paying close attention to see how these changes affect customer happiness and how the airline business competes.
