Southwest Airlines ends free checked bags policy amidst revenue pressure
- Southwest Airlines will begin charging for checked bags starting May 28, 2025, as part of a major shift in its business model.
- Passengers will incur a fee of $35 for the first checked bag and $45 for a second, affecting many fare categories except for select loyalty program members.
- This decision has drawn criticism from customers who valued the airline's long-standing policy of allowing two free checked bags.
In the United States, Southwest Airlines is set to end its longstanding baggage policy on May 28, 2025, which allowed passengers to check two bags for free. This decision marks a significant shift in the airline's business model, aimed at enhancing profitability amid increasing financial pressures. The move comes after months of advocacy from the activist investor Elliott Investment Management, which holds a substantial stake in the airline and has pushed for major changes to Southwest's revenue strategies. As part of the new policy, passengers flying on Southwest will incur fees of at least $35 for the first checked bag and $45 for a second checked bag, aligning it with the typical rates of other airlines in the industry. The announcement has sparked considerable backlash from loyal customers, many of whom perceive the free baggage policy as a defining aspect of the airline's identity. Despite the changes, existing customers who booked tickets prior to May 28 will still retain their right to check two bags for free. Furthermore, Southwest will continue to provide free baggage allowances for certain travelers, including those with top-tier status in the Rapid Rewards loyalty program and those traveling on Business Select fares. The new baggage fees will primarily apply to customers purchasing basic economy tickets, as well as popular fare categories like Wanna Get Away Plus and Anytime. In conjunction with the baggage fee adjustments, Southwest is unveiling a new basic fare tier that offers reduced pricing but imposes stricter restrictions compared to traditional fare classes. These changes reflect Southwest's strategic response to evolving market conditions and competitive pressures from other airlines, which have long charged for luggage. The company aims to reach new customer segments while still delivering the value it is known for, but there are concerns about the long-term impact on customer loyalty and brand perception as it transitions away from its free baggage legacy. Overall, the introduction of baggage fees is expected to significantly increase the airline's revenue, as fees for checked baggage garnered more than $7.3 billion for U.S. airlines in the previous year. While Southwest anticipates that the policy will improve profitability, it also risks alienating a customer base that has come to associate the brand with its generous luggage allowance and customer-friendly practices. Looking ahead, it will be crucial for Southwest to balance profitability with customer satisfaction to maintain its competitive edge in the airline industry.