Luggage will now not fly free on Southwest Airways — except you are prepared to pay up for a high-priced fare, boast elite standing, or carry one among its cobranded bank cards.
In an announcement that figured to shake the inspiration of its relationship with prospects, the Dallas-based service 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 not too long ago as final fall — made clear was amongst its prime 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 bank 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 service’s highest-priced Enterprise Choose fares.
However for all different prospects, checking a bag will value further — simply because it does on practically each different U.S. airline.
Why Southwest is ending free checked baggage
In an announcement to TPG, Southwest mentioned it was “evolving quickly,” implementing new initiatives that “assist enterprise aims and create selection for patrons.”
Not talked about in Tuesday’s assertion: the immense strain the service 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 lately.
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Un-Southwestlike adjustments
In simply the final month, Southwest laid off 15% of its company workforce — a transfer as soon as unthinkable for an organization recognized, beginning underneath longtime government Herb Kelleher, for doing proper by its staffers.
A bigger shift
All of this comes as Southwest is already making ready to ditch the open seating coverage that it was virtually synonymous with. That may go away in favor of the assigned (and additional legroom) seats discovered on the planes of all of its prime U.S. rivals.
Collectively, the adjustments 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 grew to become 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 completely different.
Extra particularly, the pivot on bag charges is a 180-degree shift for the airline — and a direct contradiction of what it advised traders, prospects 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 service made clear: it had considered ditching its “baggage fly free” coverage, however had decided such a transfer would finally be dangerous for enterprise, and would as a substitute doubtless harm its status with prospects.
“We’re keen about these insurance policies, specifically, two baggage fly free,” CEO Bob Jordan mentioned 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 in depth data-driven analysis … exhibits that they’re the suitable financial selection.”
The free baggage coverage, Jordan advised analysts final summer season, was among the many prime three causes prospects select to fly Southwest over its rivals — rating solely behind the costs it fees and the flight schedule it provides.
Wall Road analysts concurred in feedback to TPG final fall, saying that ending free checked baggage — within the phrases of 1 distinguished analyst — would doubtless be considered by prospects as a “cash seize” that might offset any income positive factors.
At the same time as hypothesis swirled about whether or not the airline would possibly finally ditch its free baggage coverage, Southwest insisted “no work” was underway to vary its “industry-leading” coverage.
Southwest’s adjustments introduced Tuesday
However half a yr later, the coverage is now set to vary.
Jordan characterised the transfer in an announcement Tuesday: “We’ve got super alternative to satisfy present and future Buyer wants, entice new buyer segments we do not compete for right now,” he mentioned, “…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 adjustments will apply to flights booked on or after Might 28. The service didn’t instantly announce pricing for its bag charges, or element any plans to cost prospects for full-size carry-on baggage – one other ancillary payment that is grown in prominence throughout the airline {industry} lately.
It is also not but clear how, or if, these insurance policies would possibly evolve as soon as the service really switches to assigned seating — reserving for which is predicted to start later this yr, with the brand new seating insurance policies deliberate to go reside in early 2026.
We must always be aware, although, the addition of bag charges are simply the most recent impediment for passengers touring on one among its lower-level fares. On prime of slashing points-earning for Wanna Get Away and Wanna Get Away Plus tickets final week, Southwest final yr revealed its customary fare prospects may even not be entitled to free seat choice as soon as its assigned seating setup begins subsequent yr.
Primary financial system coming
Nevertheless, Southwest additionally plans to introduce an extra “primary” fare class, the service mentioned 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 change to a extra “variable” redemption setup for Speedy Rewards, which can result in larger (or decrease) factors costs relying on demand for a flight.
Traditionally, such strikes towards dynamic pricing — more and more frequent for airways — have resulted in prospects having at hand over extra factors for a highly-coveted flight than they might have beforehand.
Backside line
Collectively, Southwest mentioned Tuesday’s strikes are supposed to “deepen and reward loyalty between Southwest and its most engaged prospects.”
However time will finally inform how these prospects will react, significantly because the airline does an about-face on yet one more core promise it affirmed as not too long ago as a couple of months in the past.
For now, get pleasure from these free baggage simply as you’ll open seating: it isn’t right here to remain.
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