Baggage will now not fly free on Southwest Airways — until you are keen to pay up for a high-priced fare, boast elite standing, or carry certainly one of its cobranded bank cards.
In an announcement that figured to shake the inspiration of its relationship with clients, the Dallas-based provider on Tuesday introduced it should finish its two free checked baggage coverage later this spring.
Beginning with bookings made on or after Might 28, most Southwest passengers should pay for each checked bag.
It is a seismic shift away from a standout coverage that the airline — as lately as final fall — made clear was amongst its high differentiators from different U.S. airways.
There’ll some exceptions: Southwest A-Record elite standing members will get their first checked bag free. So will Speedy Rewards loyalty members who carry a Southwest credit card.
Two small subsets of Southwest’s buyer base will retain their proper to 2 free baggage: top-tier A-Record Most well-liked members, and passengers flying on the provider’s highest-priced Enterprise Choose fares.
However for all different clients, checking a bag will value further — simply because it does on almost each different U.S. airline.
Why Southwest is ending free checked baggage
In a press release to TPG, Southwest stated it was “evolving quickly,” implementing new initiatives that “assist enterprise goals and create selection for patrons.”
Not talked about in Tuesday’s assertion: the immense stress the provider has confronted from activist investor group Elliott Funding Administration, which final yr gained a stake within the firm and in latest months upped its affect on the airline, which has suffered from less-than-stellar earnings in recent times.
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Un-Southwestlike modifications
In simply the final month, Southwest laid off 15% of its company workforce — a transfer as soon as unthinkable for a corporation recognized, beginning below longtime government Herb Kelleher, for doing proper by its staffers.
And, final week, TPG reported the provider had slashed the variety of factors most Speedy Rewards members can earn on a Southwest flight — a change the airline particularly, final fall, stated it would not make. (Adjustments to the variety of factors required for a redemption are coming quickly, too, the provider revealed Tuesday).
A bigger shift
All of this comes as Southwest is already getting ready to ditch the open seating policy that it was virtually synonymous with. That can go away in favor of the assigned (and additional legroom) seats discovered on the planes of all of its high U.S. opponents.
Collectively, the modifications symbolize one thing of an inflection level for an airline lengthy recognized for being customer- (and employee-) pleasant, devoid of the add-on charges that turned ubiquitous at different airways over the past 20 years — and, above all else, a model that stood out from the competitors exactly as a result of it was totally different.
Extra particularly, the pivot on bag charges is a 180-degree shift for the airline — and a direct contradiction of what it advised buyers, clients and journalists alike throughout an hours-long presentation on its future plans simply a number of months in the past.
Yet one more 180-degree shift
In September, Southwest executives laid out the finer particulars of its groundbreaking shift away from assigned seating, its first airline partnership with Icelandair, and its plans to evolve the Speedy Rewards loyalty program to raised match an tailored airline.
But, the provider made clear: it had thought of ditching its “baggage fly free” coverage, however had decided such a transfer would in the end be dangerous for enterprise, and would as a substitute seemingly harm its fame with clients.
“We’re keen about these insurance policies, specifically, two baggage fly free,” CEO Bob Jordan said on the firm’s Sept. 26, 2024 investor day.
“Not solely as a result of they’re a part of our historical past,” Jordan continued, “…however as a result of our intensive data-driven analysis … reveals that they’re the best financial selection.”
The free baggage coverage, Jordan told analysts last summer, was among the many high three causes clients select to fly Southwest over its opponents — rating solely behind the costs it costs and the flight schedule it affords.
Wall Avenue analysts concurred in feedback to TPG final fall, saying that ending free checked baggage — in the words of one prominent analyst — would seemingly be seen by clients as a “cash seize” that would offset any income features.
Whilst hypothesis swirled about whether or not the airline may in the end ditch its free baggage coverage, Southwest insisted “no work” was underway to alter its “industry-leading” coverage.
Southwest’s modifications introduced Tuesday
However half a yr later, the coverage is now set to alter.
Jordan characterised the transfer in a press release Tuesday: “We’ve super alternative to fulfill present and future Buyer wants, entice new buyer segments we do not compete for in the present day,” he stated, “…and return to the degrees of profitability that each we and our shareholders count on.”
Southwest’s new checked bag charges
Beneath Southwest’s new bag coverage, passengers who buy a Wanna Get Away, Wanna Get Away Plus or Anytime fare should pay for any checked bag — with a couple of exceptions.
A-Record elite standing members will get one free checked bag, as will cobranded credit score cardholders.
A-Record Most well-liked members, and passengers who buy a Enterprise Choose ticket, will get two free baggage.
The modifications will apply to flights booked on or after Might 28. The provider didn’t instantly announce pricing for its bag charges, or element any plans to cost clients for full-size carry-on baggage – one other ancillary price that is grown in prominence throughout the airline {industry} in recent times.
It is also not but clear how, or if, these insurance policies may evolve as soon as the provider really switches to assigned seating — reserving for which is anticipated to start later this yr, with the brand new seating insurance policies deliberate to go dwell in early 2026.
We should always notice, although, the addition of bag charges are simply the newest impediment for passengers touring on certainly one of its lower-level fares. On high of slashing points-earning for Wanna Get Away and Wanna Get Away Plus tickets final week, Southwest final yr revealed its customary fare clients may also not be entitled to free seat choice as soon as its assigned seating setup begins subsequent yr.
Primary economic system coming
Nevertheless, Southwest additionally plans to introduce an extra “fundamental” fare class, the provider stated Tuesday. These tickets will go on sale Might 28. It wasn’t instantly clear what restrictions these discounted tickets will include.
Extra dynamic pricing for award tickets
There was additionally information to digest on the loyalty entrance.
Southwest on Tuesday additionally revealed it should swap to a extra “variable” redemption setup for Speedy Rewards, which can result in greater (or decrease) factors costs relying on demand for a flight.
Traditionally, such strikes towards dynamic pricing — more and more widespread for airways — have resulted in clients having at hand over extra factors for a highly-coveted flight than they’d have beforehand.
Backside line
Collectively, Southwest stated Tuesday’s strikes are supposed to “deepen and reward loyalty between Southwest and its most engaged clients.”
However time will in the end inform how these clients will react, notably because the airline does an about-face on yet one more core promise it affirmed as lately as a couple of months in the past.
For now, get pleasure from these free baggage simply as you’d open seating: it isn’t right here to remain.
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