Southwest Airlines makes another historic move

The struggle bus airplane-riding Southwest Airlines yesterday said it will start charging passengers to check bags for the first time in its history, in a bid to open up another line of revenue.

• Pricing hasn’t yet been announced, but a single bag costs $35 to check on Delta, American, and United.
• In total, airlines generated $5+ billion from bag fees last year, according to federal data.

Change is in the air

The bags-now-won’t-fly-free switch follows a prolonged battle with activist investor Elliott Management (who now has six board seats), and comes as Southwest is trying to boost its profitability.

This profit-push involves ditching its longstanding free-for-all seating method for assigned seating and adding redeye flights to squeeze more use out of its planes. The company also announced its first mass layoffs in company history last month, and put an end to team-building “rallies,” a company tradition that dated back to 1985.

But…Analysts say some of these moves – like the one announced yesterday – are a bit of a gamble. Southwest last year said “rigorous research” found it would lose that much in market share if it started charging bag fees; its previous policy had set the airline apart from its competitors for decades.

✈️ In other travel news: Within the past 48 hours, three of the biggest US airlines – Delta, American, and JetBlue – dimmed their outlooks for early 2025, citing softer demand for domestic air travel.