Notoriously low cost airline Southwest has rescinded their defining quality of not charging for checked bags that has set them apart from other airlines for decades. The decision comes from outside pressure from an investment group that took a large stake (five board seats) in the company last year. In an attempt to raise revenue, consumer backlash was received immediately.
Southwest's new policy favors high-paying, extremely-frequent flyers who will not have to pay additional fees to check their bags. In addition to the checked bag rule, Southwest will be abandoning their changeable/open seating policies. There was no price of a checked bag announced in Southwest's announcement, but competitors are around $35.
Financially, the effects are currently unknown but the market sentiment indicates that investors believe this was a good move as the stock rose 8% after the announcement. Southwest also said that they would gain $1-$1.5 billion from bag fees but lose $1.8 billion in market share. Overall, while the financial effects on the company are unclear, the effect on the average consumer is clear. Southwest has abruptly gone from the airline for the infrequent flyer to catering to the elite. For consumers like me and you, it is hard to imagine we will stick with Southwest and won't just switch over to more cost effective airlines like Spirit and Allegiant.
https://www.cnbc.com/2025/03/11/southwest-airlines-charge-checked-bags.html
5 comments:
I think this move by Southwest is very interesting. Southwest has been popular, especially with families because it's affordable and allows free checked bags. Now, many of these customers might look to fly with other budget airlines. Those who can afford more might already fly with airlines like United or Delta. It definitely seems like Southwest is struggling financially, given these new policy changes and the recent layoffs of 15% of its corporate workforce. I think that these policies will do more damage to Southwest's name than good.
This is so sad, I fly Southwest because I can check my bags for free. I worry that this is going to hurt Southwest more than anything else since people like me will likely pick a different airline.
This is a questionable move by Southwest. A reason that so many people choose their airline in the first place was due to the free checked bags policy. It will be interesting to see the longterm effects of these new policy implications. At the end of the day I would not be surprised if this ultimately has more negatives than positives for the recently struggling airline.
Southwest Airlines, known for its low-cost, no-checked-bag-fee policy, has reversed this defining feature due to pressure from an investment group that gained significant influence last year. The airline will now charge for checked bags and abandon its open seating policy. The financial impact is uncertain, but the stock rose 8% following the announcement, indicating investor approval. However, the shift alienates average consumers, as Southwest increasingly caters to frequent, high-paying flyers, potentially pushing cost-conscious passengers toward rivals like Spirit and Allegiant. Along with introducing fees for checked bags, Southwest will also abandon its long-standing open seating policy, a hallmark of the airline that allowed passengers to choose any available seat without a pre-assigned one. Overall, the move signals a shift in Southwest Airlines' business strategy from its traditional emphasis on affordability and simplicity toward a more competitive, premium model aimed at attracting higher-paying customers. This change could help increase revenue in the short term, as charging for checked bags and implementing assigned seating are standard practices for many major carriers, potentially boosting profitability.
I saw a statement from the CEO of Spirit in relation to this. He was saying he's hopeful this will work in his company's benefit. It's hard to say if the new policies will give an edge to other airlines because to me there has been a long running joke around quality of flights and Spirit has been at the center of it. But who knows, a competitive market might just do the trick to bring the policy down. I also wonder what happens when all of the airlines start doing this. Will it mean one airline decides to drop the policy? Will it be enough to convince people to pack less?
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