Denver, Colorado – Southwest Airlines has made a groundbreaking decision to start charging passengers for checked bags, marking a significant shift from its long-standing policy of offering free checked bags. This decision comes after pressure from activist investors and the need to boost revenue for the airline. In an unprecedented move, Southwest is moving away from its decades-old practice of providing free checked bags, changeable tickets, and open seating.
As of May 28, customers who purchase tickets with Southwest, with the exception of those in the top fare class, will be required to pay for checked bags. However, there are some exceptions to this new policy. Elite frequent flyers with “A-List Preferred” status will still be entitled to two free checked bags, while A-List members will receive one free checked bag. Additionally, Southwest credit card holders will also be able to check one bag for free.
This change shifts Southwest in line with its competitors, who collectively earned $5.5 billion in revenue from bag fees last year. The decision to implement fees for checked bags comes as a surprise, as Southwest executives have consistently emphasized the importance of free checked bags as a customer perk that sets them apart from other airlines. However, the airline has now acknowledged the need to increase revenue in order to cover costs.
In addition to the new baggage fee policy, Southwest also revealed plans to introduce a basic economy fare and adjust the way customers earn Rapid Rewards. The changes to Rapid Rewards will be based on how much customers pay, while redemption rates will be subject to flight demand, aligning with the dynamic pricing models used by competitors. Moreover, flight credits for tickets purchased as of May 28 will expire within a year, depending on the type of fare bought.
These strategic changes are part of Southwest’s broader efforts to streamline operations and cut costs, as it looks to improve its financial performance in the wake of the pandemic. Last month, the airline announced its first mass layoff, affecting about 1,750 jobs, in a bid to transition into a more efficient and adaptable organization. This move represents a significant shift for Southwest, which has historically prided itself on its unique approach to customer service and operational strategies.