Baggage will not fly free on Southwest Airways — until you are prepared to pay up for a high-priced fare, boast elite standing, or carry one in every of its cobranded bank cards.
In an announcement that figured to shake the muse of its relationship with prospects, the Dallas-based provider on Tuesday introduced it’s going to finish its two free checked luggage coverage later this spring.
Beginning with bookings made on or after Could 28, most Southwest passengers must 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 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 Fast Rewards loyalty members who carry a Southwest bank card.
Two small subsets of Southwest’s buyer base will retain their proper to 2 free luggage: top-tier A-Record Most popular members, and passengers flying on the provider’s highest-priced Enterprise Choose fares.
However for all different prospects, checking a bag will value further — simply because it does on almost each different U.S. airline.
Why Southwest is ending free checked luggage
In a press release to TPG, Southwest mentioned it was “evolving quickly,” implementing new initiatives that “help enterprise targets and create alternative 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 current months upped its affect on the airline, which has suffered from less-than-stellar earnings lately.
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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 an organization identified, beginning beneath longtime government Herb Kelleher, for doing proper by its staffers.
And, final week, TPG reported the provider had slashed the variety of factors most Fast Rewards members can earn on a Southwest flight — a change the airline particularly, final fall, mentioned it would not make. (Modifications 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 coverage that it was virtually synonymous with. That may go away in favor of the assigned (and further legroom) seats discovered on the planes of all of its high U.S. opponents.
Collectively, the modifications characterize one thing of an inflection level for an airline lengthy identified for being customer- (and employee-) pleasant, devoid of the add-on charges that turned ubiquitous at different airways during the last twenty 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, 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 Fast Rewards loyalty program to higher match an tailored airline.
But, the provider made clear: it had considered ditching its “luggage fly free” coverage, however had decided such a transfer would finally be unhealthy for enterprise, and would as an alternative probably injury its status with prospects.
“We’re enthusiastic about these insurance policies, particularly, two luggage 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 appropriate financial alternative.”
The free luggage coverage, Jordan advised analysts final summer time, was among the many high three causes prospects select to fly Southwest over its opponents — rating solely behind the costs it costs and the flight schedule it affords.
Wall Road analysts concurred in feedback to TPG final fall, saying that ending free checked luggage — within the phrases of 1 distinguished analyst — would probably be seen by prospects as a “cash seize” that would offset any income beneficial properties.
At the same time as hypothesis swirled about whether or not the airline may finally ditch its free luggage 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: “Now we have great alternative to satisfy present and future Buyer wants, entice new buyer segments we do not compete for in the present day,” he mentioned, “…and return to the degrees of profitability that each we and our shareholders anticipate.”
Southwest’s new checked bag charges
Below Southwest’s new bag coverage, passengers who buy a Wanna Get Away, Wanna Get Away Plus or Anytime fare must pay for any checked bag — with a number of exceptions.
A-Record elite standing members will get one free checked bag, as will cobranded credit score cardholders.
A-Record Most popular members, and passengers who buy a Enterprise Choose ticket, will get two free luggage.
The modifications will apply to flights booked on or after Could 28. The provider didn’t instantly announce pricing for its bag charges, or element any plans to cost prospects for full-size carry-on luggage – 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 may evolve as soon as the provider truly switches to assigned seating — reserving for which is predicted to start later this yr, with the brand new seating insurance policies deliberate to go dwell in early 2026.
We must always be aware, although, the addition of bag charges are simply the newest impediment for passengers touring on one in every 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 prospects will 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 a further “fundamental” fare class, the provider mentioned Tuesday. These tickets will go on sale Could 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’s going to change to a extra “variable” redemption setup for Fast Rewards, which is able to 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 prospects having handy over extra factors for a highly-coveted flight than they’d 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 one more core promise it affirmed as not too long ago as a number of months in the past.
For now, get pleasure from these free luggage simply as you’d open seating: it is not right here to remain.
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