Southwest Airlines on Tuesday announced plans to start charging passengers for checking in their baggage in a bid to boost revenue, ending a long-running free baggage policy that served as a core part of the low-cost carrier’s identity.
A Southwest Airlines Boeing 737 departs from San Diego International Airport.
In a press release, the company said the two free checked bags perk will be limited to passengers who hold the top-tier “A-List Preferred” status on the airline’s loyalty program or those who purchase the priciest “Business Select” tickets.
Customers on the next loyalty tier and Southwest branded rewards credit card holders will be allowed to check in a single piece of baggage for free.
All other customers will be charged for their “first and second checked bags” after May 28.
The airline did not mention how much it plans to charge for checked-in luggage.
Like its competitors, Southwest will also introduce a new “basic” fare tier aimed at price-conscious fliers, which ditches perks like advanced seat assignments and extra legroom options.
The company also announced changes to its loyalty points system, with customers buying the priciest tier of tickets set to earn more points, while the rewards for flying on the lower tier fares will be reduced.
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The company described the move as “strategic” and its CEO Bob Jordan said the changes will allow the airline to reach new customer segments and “return to the levels of profitability that both we and our Shareholders expect.” The airline’s statement also pitched it as a move to “deepen and reward loyalty” with its most “engaged” fliers.
Last year, the company announced plans to ditch its earlier open seating policy—which was also considered a hallmark feature of the airline—and add paid premium seating options that include extra legroom. In Tuesday’s announcement, the company said the latest changes “add to the initiatives already underway at Southwest.”
Southwest’s free checked bag policy was a core part of the airline’s identity, with the company even trademarking its “Bags fly free” slogan. While most other major airlines have charged for checked luggage for several years, Southwest had vehemently defended the policy as a key differentiator. Even when it announced changes to its seating policy last year, Southwest’s CEO insisted the “bags fly free” policy will remain untouched. Last year, activist investor Elliott Investment Management disclosed a $1.9 billion stake in the airline and criticized the company’s leaders of showing a “stubborn unwillingness to evolve.” Baggage fees in particular were a contentious issue.
According to the data aggregated by the Bureau of Transportation Statistics, Southwest earned $73 million from baggage fees in 2023 and $62 million in the first three quarters of last year. This is significantly lower than rivals like American Airlines, which made more than $1.35 billion in 2023 and $1.12 billion in the first nine months of 2024. United, Delta, Spirit and JetBlue made $1 billion, $788 million, $650 million and $480 million respectively from baggage fees in the first three quarters of 2023.
Elliott Targets Southwest CEO in $1.9 Billion Activist Push (Bloomberg)
Southwest Airlines to Slash Corporate Workforce in First Mass Layoff (Wall Street Journal)