Southwest Airlines has announced a historic change in its baggage policy that will mark the end of an era for the airline and its customers.
Starting from May 28, 2025, the company will begin charging for checked baggage, eliminating one of its main competitive advantages in the low-cost airline market.
For decades, Southwest has set itself apart from its competitors with its motto "Two bags fly free" , allowing its passengers to check up to two bags at no additional cost.
However, this practice has come to an end.
"We have a great opportunity to meet the current and future needs of customers, attract new customer segments that we are not competing for today, and return to the levels of profitability that both we and our shareholders expect," stated Bob Jordan, CEO of Southwest, in a statement released on the airline's website.
Details of the new baggage policy
The airline has stated that passengers who do not belong to the higher tiers of its loyalty program Rapid Rewards A-List Preferred, do not travel with Business Select tickets, or are not holders of the airline's credit card, will have to pay for checking their luggage.
However, Southwest has not yet revealed the specific fees that will apply to baggage check-in.
According to the details provided by the company, the benefits of free baggage will be maintained for the following groups:
Members of 'Rapid Rewards A-List Preferred' and passengers with 'Business Select' fares can check up to two bags at no additional charge.
'A-List' members and some select clients will receive a free checked suitcase.
Cardholders of 'Rapid Rewards' credit cards will receive a credit to cover the cost of a checked bag.
For the rest of the travelers, Southwest has announced that it will also implement a new, lower-cost basic fare that will include options such as seat selection and increased legroom.
Reasons Behind the Change and Its Financial Impact
This change occurs in a context of economic pressures for Southwest Airlines.
In recent months, the airline has faced financial difficulties and has been under pressure from investors to increase its profitability.
In October, the company reached an agreement with the hedge fund Elliott Investment Management, resulting in the addition of several members from Elliott to the board of directors.
Last month, Southwest announced the layoff of 1,750 employees, representing 15% of its workforce, marking the first significant personnel reduction in its 53-year history.
The airline justified the decision as a measure to reduce costs and transform the company into a "more agile, fast, and efficient organization."
The new bag charging policy is a key strategy in this restructuring process.
In 2023, Southwest raised only $73 million in baggage fees, a figure significantly lower than that of its main competitors.
United Airlines reported $1 billion, Delta $788 million, Spirit $650 million, and JetBlue $480 million in the same period, according to reviews from the U.S. press.
Wall Street has insisted that Southwest was forgoing significant revenue by maintaining its free baggage policy.
Last year, the airline estimated that the charge for baggage would generate approximately 1.5 billion dollars annually.
However, it also estimated that it could lose up to 1.8 billion dollars due to the loss of customers who chose the airline precisely for its no-cost baggage policy.
Following the announcement, Southwest's shares rose by more than 9% on Tuesday, suggesting that investors view this move as a step in the right direction for improving the company's profitability.
Other changes at Southwest Airlines
The charge for luggage is not the only change at Southwest. The airline is also implementing other measures aimed at enhancing its competitiveness:
-Introduction of Basic fares, with cheaper tickets that will allow seat selection and provide more legroom.
- Ticket sales through platforms like Expedia.
-Introduction of nighttime flights (redeye flights).
- Plans for seat assignments, eliminating their traditional open boarding system.
Less than a year ago, the airline also announced the elimination of its open boarding system, a model it has used for over five decades. Flights with assigned seating are expected to start operating in 2026.
Customer Reactions and the Future of Southwest
The announcement has generated mixed reactions among the airline's customers.
While some frequent passengers may continue to enjoy certain benefits, many regular Southwest travelers see the baggage fees as a significant loss of value.
"Southwest was the only airline where I didn't have to worry about paying extra for my luggage. Now it's just like the others," commented a customer on social media.
Southwest's transition to a more traditional airline model, with charges for luggage and assigned seating, could alter travelers' perceptions of the company.
However, it will also allow it to compete more aggressively with airlines like United, Delta, and American Airlines in the battle for additional revenue.
With these changes, Southwest enters a new era where profitability and adapting to market trends seem to take priority over its traditional customer-focused approach.
Frequently Asked Questions About the Change in Southwest Airlines' Baggage Policy
Why has Southwest Airlines decided to charge for checked baggage?
Southwest Airlines has decided to charge for checked baggage as part of a strategy to increase its profitability in a context of economic pressures. The airline aims to attract new customer segments and regain the levels of profitability that both the company and its shareholders expect, amid recent financial challenges.
Who will still have free checked baggage with Southwest Airlines?
The benefits of free luggage will be maintained for certain groups: 'Rapid Rewards A-List Preferred' members and passengers with 'Business Select' fares can check in up to two bags at no additional cost. Additionally, 'A-List' members and some select customers will receive one free checked bag, and holders of 'Rapid Rewards' credit cards will receive a credit to cover the cost of a checked bag.
When will the new baggage policy of Southwest Airlines take effect?
The new baggage policy of Southwest Airlines will take effect on May 28, 2025. Starting from that date, passengers who do not belong to the higher tiers of their loyalty program, are not traveling with Business Select tickets, or do not hold the airline's credit card will have to pay for checking their bags.
How has the market reacted to the announcement from Southwest Airlines?
After the announcement of the change in baggage policy, Southwest Airlines' shares rose by more than 9%. This suggests that investors view this measure as a step in the right direction to improve the company's profitability, despite potential losses of customers who valued the benefit of free baggage.
What other changes is Southwest Airlines implementing to enhance its competitiveness?
In addition to charging for luggage, Southwest Airlines is introducing more economical Basic fares that will allow for seat selection and provide more legroom. It is also selling tickets through platforms like Expedia, introducing overnight flights, and planning to implement assigned seating on flights, eliminating its traditional open boarding system.
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