A Southwest Airways Boeing 737 MAX is pushed again from the gate at San Diego Worldwide Airport in San Diego, Aug. 24, 2024.
Kevin Carter | Getty Pictures
Southwest Airlines introduced Tuesday what was as soon as unthinkable: It should begin charging customers to examine their baggage.
It is a $300 million gamble. Final yr, Southwest stated its “rigorous analysis” discovered it will lose that a lot in market share if it began charging bag charges. The coverage has set Southwest other than its opponents for many years.
Eliminating its well-known “two baggage fly free” technique is a part of a massive push on the service to ditch its longstanding buyer perks and insurance policies. Southwest additionally introduced final yr that it is shifting from open seating to a single-class cabin with the intention to elevate income. One other change introduced Tuesday: primary financial system tickets that do not enable free modifications.
This is what vacationers have to know in regards to the modifications:
Who pays for baggage?
Vacationers who purchase any ticket besides Southwest’s top-level Enterprise Choose fare should pay charges to examine baggage. Prospects who buy a Enterprise Choose ticket will be capable of examine two baggage without cost.
Prime-tier A-Checklist Most well-liked frequent flyer program members may even get two checked baggage without cost. A-Checklist degree members will be capable of examine one bag without cost, as will these with a Southwest bank card.
How a lot will it price to examine a bag?
Southwest did not disclose how a lot it can price to examine a bag however charges begin at $35 apiece on opponents Delta, United and American.
When do the brand new insurance policies take impact?
The brand new checked baggage charges go into impact for tickets bought on or after Might 28.
Why is that this occurring?
Southwest has been underneath rising strain to lift income and enhance returns after activist hedge fund Elliott Investment Management took a stake within the airline final yr and pushed for modifications to the service’s enterprise mannequin.
Southwest executives have lengthy instructed Wall Avenue buyers and clients that its “two baggage fly free” coverage is sacrosanct, one thing that units it other than opponents.
At an investor day in September, the service stated it will make as much as about $1.5 billion if it charged for baggage however lose $1.8 billion in market share from the coverage change.
What else is going on?
Heaps! Southwest goes to launch a primary financial system fare that isn’t refundable and does not enable for modifications. It will not enable for same-day standby tickets.
Flight credit for these “primary” tickets, if unused, will expire in six months whereas credit for different flights will expire in 12 months. Beforehand, Southwest credit did not expire.
The service final yr stated it plans to begin promoting tickets with assigned seats, ending its many years of its open-seating coverage. It should additionally quickly provide seats with further legroom, a bid to compete with extra full-service airways.
