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
- Customer Loyalty: The elimination of free checked bags may alienate loyal customers who chose Southwest for this benefit. Industry experts warn that this could lead to a loss of market share to competitors.
- Revenue Generation: The airline aims to generate significant revenue from baggage fees, which could amount to approximately $1.5 billion annually. However, this comes at the risk of losing customers who prefer airlines with more generous baggage policies.
- Market Positioning: By adopting practices similar to traditional carriers, Southwest risks losing its unique brand identity. The shift towards a more conventional pricing model may confuse customers who valued the airline's distinct offerings.
- Future Competitiveness: As Southwest introduces a basic economy fare and other changes, it will need to balance cost-cutting measures with maintaining customer satisfaction to remain competitive in a crowded market.
What the papers say
According to the New York Times, the decision to end the free baggage policy is a significant departure from Southwest's long-standing practices, which have been central to its brand identity. CEO Bob Jordan stated that the changes are necessary to meet profitability expectations amid rising operational costs. Meanwhile, Delta's CEO Scott Kirby remarked that this move could lead to customers switching airlines, indicating a potential shift in market dynamics. Business Insider UK highlighted that the airline's previous commitment to free bags was a major draw for customers, and the new policy could jeopardize that loyalty. The Independent noted that the airline's stock rose following the announcement, suggesting investor approval of the strategic shift.
How we got here
Southwest Airlines has historically differentiated itself with its 'bags fly free' policy, which has been a key selling point for customers. However, facing pressure from activist investors and declining revenues, the airline is overhauling its business model, including the introduction of fees for checked luggage.
Go deeper
- What are the new baggage fees for Southwest Airlines?
- How will this change affect frequent flyers?
- What are other airlines doing in response to this policy?
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.
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.
