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Why did Southwest Airlines end its free baggage policy?
Southwest Airlines ended its free baggage policy to boost revenue amid financial struggles. The airline reported a $149 million net loss in Q1 2025 and is under pressure from activist investors to improve its financial performance. CEO Bob Jordan indicated that the new baggage fees are expected to contribute significantly to the airline's revenue.
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How will this affect travelers and their budgets?
Travelers will now face additional costs when checking bags, with fees set at $35 for the first checked bag and $45 for the second. This change could impact budgets, especially for families or frequent travelers who previously relied on the free baggage policy. Customer backlash has already been noted, indicating potential dissatisfaction among loyal customers.
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What are the new baggage fees and exceptions?
The new baggage fees are $35 for the first checked bag and $45 for the second checked bag. However, premium customers will remain exempt from these fees, which may help retain some of Southwest's loyal customer base. It's important for travelers to factor these costs into their travel budgets moving forward.
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Are other airlines likely to follow suit?
The trend of charging for services that were once complimentary is growing among budget airlines. As Southwest Airlines shifts its policy, it raises the question of whether other airlines will adopt similar practices. The broader industry trend suggests that travelers may need to prepare for more airlines implementing baggage fees in the future.
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What has been the customer reaction to this change?
Customer reaction has been largely negative, with many expressing disappointment on social media. The backlash highlights the risk Southwest faces in losing loyal customers who valued the airline's previous baggage policy. This change could affect the airline's reputation and customer loyalty in the long run.
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What financial impact is Southwest Airlines expecting from this change?
Southwest Airlines anticipates an incremental EBIT contribution of $4.3 billion in 2026 from the new baggage fees. This financial boost is crucial for the airline as it navigates through its current financial challenges and seeks to stabilize its business model.