Southwest Airlines is scrapping its free checked baggage perk, a move that ends one of its most iconic features, per CNN. The airline announced Tuesday it will start charging for the first and second checked bags as of May 28. Only A-List loyalty members and business fare travelers will dodge the new fees.
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Southwest's CEO Bob Jordan framed the shift as a bold step forward. "We're seizing a huge opportunity to meet evolving customer demands, tap into new markets, and restore the profitability our shareholders deserve," he said in a press release.
The decision marks a sharp break from tradition for the airline, which has offered free checked bags for nearly six decades. Needless to say, customers aren't exactly thrilled with this news.
For years, Southwest stood apart as rivals piled on baggage fees. The carrier even trademarked "bags fly free," weaving it into its marketing DNA. Last year, Jordan told investors the policy was sacred.
"It's a big reason people pick Southwest," he said on an analyst call, citing surveys where free bags ranked just behind fares and schedules. He insisted fees weren't on the table then.
Southwest Baggage Fees
But Jordan also hinted at trade-offs. Charging for bags, he noted, slows boarding as passengers jostle for overhead bin space. Some bags end up rerouted to the cargo hold when bins fill up. Southwest hasn't disclosed the new fees yet. Whatever the price, analysts expect a quick profit boost — Southwest handles two to three times more checked bags than its peers.
Even without fees, Southwest raked in $73 million from baggage charges in 2023, per Department of Transportation data. That climbed to $62 million in the first nine months of 2024. Still, it's pocket change compared to competitors. American Airlines hauled in $1.4 billion last year, United Airlines nabbed $1.2 billion, and Delta Air Lines pocketed $985 million.
Rivals pounced on the news. Delta CEO Ed Bastian, speaking at an investor conference Tuesday, suggested Southwest's move could send customers their way.
"Some picked them for free bags," he said. "Those travelers are now in play." Southwest's stock (LUV) surged over 9% in premarket trading.
The baggage shift follows other big changes. Activist investor Elliott Investment Management grabbed a $1.9 billion stake last year, pushing for a shake-up. Southwest responded by ditching open seating for assigned seats, adding premium options, and launching red-eye flights — aligning closer to legacy carriers.
