Big news for travelers: Southwest Airlines will start charging fees for checked bags for the first time ever. This marks a significant shift for a company that’s been known for its customer-friendly policies, including free checked luggage.
Southwest was under pressure from activist group Elliott Investment Management. After investing in the airline, they pushed for changes to boost revenue. For years, Southwest has stood out by allowing free checked bags, but that’s changing now.
Starting May 28, passengers flying Southwest will need to pay to check bags unless they have certain elite statuses. If you’re an “A-List Preferred” member, you can check two bags for free. A-List members get one free bag, and Southwest credit card holders also enjoy this perk.
This shift aligns Southwest more closely with other airlines that earned $5.5 billion from bag fees last year. While Southwest has previously claimed that their free bag policy attracts customers, they acknowledged the need for higher revenue to keep up with costs.
COO Andrew Watterson recently said in an interview that these changes should help manage revenue better, despite the risk of passengers choosing other airlines. Just last year, Southwest’s former chief transformation officer warned that they might lose money if they began charging for bags.
In addition to baggage fees, Southwest is rolling out a new basic economy fare, making it similar to what other airlines provide. They will also change how frequent flyer miles are earned. Now, you’ll earn more miles based on ticket price, similar to what competitors are doing. Plus, flight credits for tickets purchased after May 28 will expire in one year or sooner, based on the fare type.
The airline has been undergoing various changes lately as it seeks to catch up to its competitors. Last July, Southwest surprised many by moving from an open seating policy to assigned seating, also introducing “premium” extra legroom options for the first time. There’s also been a focus on cutting costs, with the company announcing layoffs of about 1,750 employees, roughly 15% of its corporate workforce.
Southwest’s leadership has shifted considerably, too, with a new finance chief and other management changes. The airline is also reducing routes and scaling back other long-standing practices.
Clearly, Southwest is at a crossroads, aiming to transform itself into a more efficient and competitive airline in a constantly evolving industry.
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