What's happened
Southwest Airlines will end its long-standing 'two bags fly free' policy starting May 28, 2025. This shift, driven by investor pressure, aims to boost revenue amid declining passenger volumes and increased competition. Only select loyalty members will retain free baggage privileges, marking a significant change in the airline's business model.
What's behind the headline?
Impact of Policy Change
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Customer Loyalty: The elimination of free checked bags is likely to alienate price-sensitive customers who chose Southwest for its unique offerings. This could lead to a shift in market share towards competitors like United and Delta, who have already capitalized on similar policies.
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Revenue Generation: Southwest anticipates that charging for checked bags could generate significant revenue, estimated at $1.5 billion annually. However, this comes at the risk of losing approximately $1.8 billion in market share from customers who may switch airlines due to the change.
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Market Positioning: With the introduction of a basic economy fare and the end of open seating, Southwest is positioning itself similarly to other airlines, which may dilute its brand identity. The airline's CEO, Bob Jordan, stated that these changes are necessary to return to profitability, but they may also compromise the unique value proposition that has historically set Southwest apart from its competitors.
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Future Outlook: As the airline industry continues to evolve, Southwest's ability to retain its loyal customer base while adapting to new revenue models will be crucial. The upcoming changes could redefine customer expectations and loyalty in the airline sector.
What the papers say
According to the New York Times, Southwest's decision to end its free baggage policy is a significant shift from its long-standing practices, which have been a key differentiator for the airline. CEO Bob Jordan emphasized the need for these changes to meet shareholder expectations and improve profitability. Meanwhile, industry analysts like Delta's Glen Hauenstein noted that this move could make Southwest's customers 'up for grabs' as they may seek alternatives that still offer free baggage. The Wall Street Journal highlighted that this policy change is part of a broader trend among airlines to monetize services that were previously complimentary, reflecting the industry's response to rising operational costs and competitive pressures. Read more in the New York Times for a detailed analysis of how this shift could impact customer loyalty and market dynamics.
How we got here
Southwest Airlines has historically differentiated itself with its 'Bags Fly Free' policy, attracting customers who value this perk. However, facing pressure from activist investors and declining revenues, the airline is overhauling its business model, including the introduction of bag fees and a basic economy fare class.
Go deeper
- How will this affect Southwest's customer loyalty?
- What are the reactions from other airlines?
- What alternatives do travelers have now?
Common question
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Why is Southwest Airlines Ending Free Checked Bags?
Southwest Airlines has announced a significant change to its baggage policy, ending the long-standing practice of allowing two free checked bags for most passengers starting May 28, 2025. This decision raises questions about the airline's future, its impact on travelers, and the broader implications for the airline industry. Here are some common questions and answers regarding this major shift.
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What Are the Latest Trends in the Airline Industry?
The airline industry is undergoing significant changes, especially with recent policy shifts like Southwest Airlines ending its free checked bag policy. As airlines adapt to economic pressures and changing consumer demands, travelers are left wondering how these trends will affect their flying experience. Here are some common questions about the evolving landscape of air travel.
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Why Did Southwest Airlines End Its Free Baggage Policy?
Southwest Airlines has announced the end of its long-standing 'two bags fly free' policy, effective May 28, 2025. This decision, influenced by investor pressure and changing market dynamics, raises several questions about its impact on travelers and the airline industry as a whole. Below, we explore the implications of this significant policy shift.
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Which Airlines Still Offer Free Baggage?
With recent changes in airline policies, especially Southwest Airlines ending its free baggage policy, travelers are left wondering which airlines still provide complimentary checked bags. This shift raises questions about how baggage fees vary across airlines and what travelers can do to avoid these costs.
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Why Are Travel Costs Rising in 2025?
As travel costs continue to climb in 2025, many travelers are left wondering what factors are driving these increases. From airline policy changes to global economic shifts, understanding the landscape can help you navigate your travel plans more effectively. Below, we explore the key questions surrounding rising travel expenses and what you can do to save money.
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Why is Southwest Airlines Ending Its Free Baggage Policy?
Southwest Airlines has announced a significant change to its baggage policy, ending the long-standing 'two bags fly free' offer starting May 28, 2025. This decision has raised many questions among travelers and industry experts alike. What does this mean for future travel costs and customer loyalty? Below, we explore the implications of this policy shift and what travelers can expect moving forward.
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What Are the Latest Global Issues Affecting Travel and Health?
As the world grapples with various pressing issues, from airline policy changes to emerging health crises, it's crucial to stay informed. This page addresses key questions surrounding these topics, providing insights into how they impact global travel and public health.
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Why is Southwest Airlines Ending Its Free Baggage Policy?
Southwest Airlines has announced a significant change to its baggage policy, ending the long-standing 'two bags fly free' benefit starting May 28, 2025. This decision has raised questions among travelers about its implications for ticket prices, customer loyalty, and alternative options for baggage fees. Below, we explore the key aspects of this policy change and what it means for passengers.
More on these topics
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Southwest Airlines Co. is a major American airline headquartered in Dallas, Texas, and is the world's largest low-cost carrier.
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Delta Air Lines, Inc., typically referred to as Delta, is one of the major airlines of the United States and a legacy carrier. It is headquartered in Atlanta, Georgia.
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Elliott Management Corporation is an American investment management firm. It is also one of the largest activist funds in the world.
It is the management affiliate of American hedge funds Elliott Associates L.P. and Elliott International Limited. The Elli
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United Airlines, Inc. is a major American airline headquartered at Willis Tower in Chicago, Illinois. United operates a large domestic and international route network spanning cities large and small across the United States and all six continents.
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Robert Jordan is the Executive Vice President of Corporate Services for Southwest Airlines. On 23 June 2021, it was announced that he would succeed Gary C. Kelly as the sixth CEO of the company in February 2022.
Jordan graduated from Texas A&M Univers