Southwest Airlines: A New Era of Baggage Fees and Business Model Changes

As of February 18, 2025, a significant shift is underway at Southwest Airlines. The beloved "two bags fly free" policy—long a hallmark of the airline’s commitment to customer service—will soon be a thing of the past. Starting Wednesday, passengers will pay for checked baggage for the first time in over fifty years, marking a major transition in the airline’s approach to its business model.

Why the Change?

In a decision that has taken many by surprise, Southwest is responding to increasing pressure to enhance its revenue streams. With U.S. airlines collecting nearly $7.3 billion in baggage fees last year alone, the company faces a dilemma. Executives who once passionately defended the free-bag policy now grapple with shareholder expectations, particularly after activist investor Elliott Investment Management gained influence through its stake in the airline.

What Travelers Need to Know

Under the new regulations, passengers purchasing tickets on or after the designated date will find themselves subject to checked bag fees, a departure from the airline’s established model. However, the airline has stated that tickets bought prior to this cutoff will still be honored under the old policy.

• Fee Structure: Although the specific amounts remain undisclosed, competitors typically charge $35 to $40 for a first checked bag on domestic flights.

• Fare Types Affected: Fees will impact various fare classes, including the new Basic fare, Wanna Get Away Plus, and Anytime tickets.

Exemptions for Loyalty Members

Frequent flyers can rejoice, as Southwest will continue to waive checked bag fees for top-tier members of its Rapid Rewards loyalty program. Key exemptions include:

• Top-Tier Status Members: Passengers with elite status will keep the benefit of two free checked bags.
• Co-Branded Credit Card Holders: Those traveling with a Southwest Airlines credit card will enjoy one free checked bag for themselves and their companions.
• A-List Members: This group will also be allowed to check their first bag free.

Introducing Basic Economy

On the same day as the new baggage policy, Southwest will launch its Basic fare option. This type of ticket comes with numerous restrictions:

• No Changes: Once purchased, you won’t be able to modify your ticket.
• Last to Board: Basic fare customers will board after all other passengers, making it less ideal for those who desire optimal seating.
• Shorter Fare Credit Expiration: Fare credits for Basic tickets will expire in six months, compared to 12 months for other fare types.

A Shift in Seat Assignments

One of the most defining characteristics of Southwest Airlines has been its open-seating policy. This feature, enjoyed by loyal customers for years, is set to change. Starting in 2026, the airline will begin offering ticket sales that include assigned seating, alongside an introduction of extra legroom seating options for an additional fee.

Can Southwest Adapt?

Recognizing the potential impact of more baggage on flight operations, Southwest executives are preparing accordingly.

• Enhanced Infrastructure: Larger overhead bins are being installed across their Boeing fleet, facilitating carry-on storage.
• Support at Airports: Staff will have mobile bag-tag printers available at gates and lobbies to streamline the new check-in process.

Customer Reaction

Since the announcement, feedback on social media has been overwhelmingly negative, with many customers expressing disappointment. However, CEO Bob Jordan asserts that the initial fallout has not deterred bookings, maintaining that the airline has not seen a "book-down" following the announcement.

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