US: Southwest Airlines, in a major policy shift, ends free check-in of bags

Southwest Airlines is rolling out baggage fees for the first time. This move will mark an end to their long-standing customer benefit which has defined the airline for decades. The new policy, which will be effective on tickets bought on or after May 28, is a major break from its historical ‘two bags fly free’ policy.

A major shift for Southwest

This move comes with the airline facing economic woes and pressure from their investor Elliott Investment Management. The firm had won five seats on the board of Southwest Airline last year.

Elliott has called for blanket changes, such as reducing costs and generating revenue to position the airline on par with its peers, stated a CNBC report.

However, customers who buy regular fares will now have to pay for checked bags. Although there still are exceptions for the highest fare tier, Southwest credit cardholders, and elite frequent flyers, the report added.

Southwest Airline’s decision came after years of resistance from executives. They, as per CNBC, repeatedly said that the key reason customers choose the airline was their decision to provide free baggage.

In July 2023, Southwest Airlines’ CEO Bob Jordan told investors that free checked-in bags were one of their top competitive advantages.

However, Chief Operating Officer Andrew Watterson acknowledged a change in approach. He stated that the airline needs to generate more revenue to cover rising costs.

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Other policy changes

According to the CNBC report, a basic economy fare is also being introduced by the airlines, following a strategy used by its rivals for years. Additionally, the airline is also revamping its frequent flyer programme with rewards tied to ticker price and redemption rate, which will be modified according to demand.
Depending on the fare type, flight credits for tickets bought May 28 onwards will expire within one year. Southwest’s former policy, which permitted unrestricted credit use, was thereby reversed.

Cost-saving policies in the face of industry issues

As Southwest fights to become profitable, the change is the most recent of many major swings. Recently, the airline revealed major staff reductions, affecting 1,750 corporate positions, which makes for about 15% of its corporate staff. Besides cutting bankrupt courses, it has cancelled summer internships and long-established staff events.

Southwest announced intentions last year to end their single-class cabin model by introducing premium seating options and replacing their long-standing open seating policy with assigned seating.

Along with these, the airline also replaced its chief financial officer and chief administrative officer, each of whom had been with the business for more than 30 years.

FAQs:

1. Will Southwest ever charge for bags?
Yes, starting with tickets bought after May 28, customers will probably have to pay to check-in their luggage. The only exceptions are for those frequent flyer members or credit card holders.

2. Why is Southwest Airlines doing this?
Southwest Airlines is trying to figure out some money issues. Investors are wanting the airline to make a bigger profit. Southwest says they need the extra cash to pay for costs.