Southwest Airlines Shifts Stance on Free Checked Bags

Southwest Airlines, a Dallas-based carrier, has made the decision to start charging certain travelers for checked bags. This shift comes in response to mounting pressure from Elliott Investment Management, a firm that took a stake in the airline in 2024 and thereafter secured five seats on its board. Elliott has been pushing the airline to implement significant changes, as reported by CNBC.

Changes are Rolling in for Southwest

In July, Southwest announced the end of its open seating policy on flights, which was a unique feature of the airline. More recently, in February, the airline revealed that it would be cutting 15% of its corporate roles to reduce costs and reorganize the company, as per Breitbart News. The most recent move, concerning checked bags, is detailed in a report by CNBC. For tickets purchased on or after May 28, customers, except those in the top-tier fare class, will be required to pay for checked bags. However, there are exceptions for elite frequent flyers with "A-List Preferred" status, who will still receive two free checked bags, and "A-List" members, who will get one free checked bag. Southwest credit card holders will also continue to receive one free checked bag.

The End of an Iconic Perk

The phrase "Two bags fly free" has long been a registered trademark of Southwest Airlines. However, the decision to charge for checked bags represents a significant reversal of what executives had previously considered a non-negotiable passenger benefit. This change aligns Southwest with its industry competitors, who collectively generated over $5 billion from bag fees last year, according to federal data. Customers who spoke to 11 Alive expressed their shock and disappointment at the news. One customer stated, "The way the economy is, you know, everybody likes the free baggage. I mean, I guess you gotta do what you gotta do. But I don’t think too many people are going to be happy with that."

A Strategic Decision with Mixed Reactions

Southwest executives had long maintained that they did not plan to charge for checked bags. At an investor day in September, the airline presented that charging for bags could generate between $1 billion and $1.5 billion but would also result in a potential loss of $1.8 billion in market share. The airline’s research indicated that the "bags fly free" policy had generated market share gains that exceeded the potential lost revenue from bag fees. This policy shift is likely to be met with resistance from loyal customers who have come to expect this perk.

The Future of Airline Policies

As the aviation industry continues to evolve, airlines are constantly evaluating ways to increase revenue while maintaining passenger satisfaction. Southwest’s decision to charge for checked bags reflects the broader trends in the industry, where additional fees for services have become more common. Whether this decision will benefit the airline in the long run remains to be seen, but it is clear that such changes can have significant impacts on customer loyalty and satisfaction.

Conclusion

Southwest Airlines’ decision to start charging for checked bags marks a significant change in its pricing strategy. While this move aligns the airline with industry standards and aims to boost revenue, it risks alienating some of its loyal customers who have come to appreciate the perk of free checked bags. As the airline navigates this change, it will be important to monitor both its financial performance and customer feedback to ensure that the decision supports both profitability and long-term growth.