Southwest Airlines Changes Checked Bag Policy Amidst Financial Shift

Southwest Airlines Implements New Checked Bag Fees

NASHVILLE, Tenn. — Southwest Airlines is set to change its longstanding policy of free checked bags, a move prompted by the need to drive revenue growth. Effective for flights booked on or after May 28, passengers will face new fees for checked luggage, with the first bag costing $35 and the second bag $45.

This shift marks a significant departure from Southwest’s traditional approach that appealed to budget-conscious travelers. Until now, the airline has differentiated itself in the competitive airline market by allowing passengers to check bags at no additional charge — a policy that established its reputation as a "no-frills" carrier.

Exceptions to the New Fees

Not all travelers will be impacted by this change. Rapid Rewards A-List Preferred members, customers flying on Business Select, or those in Choice Extra fare classes will still enjoy benefits that include complimentary checked luggage for themselves and up to eight other passengers on the same reservation. Furthermore, A-List Members and holders of the Rapid Rewards credit card will also benefit from one free checked bag, as the airline aims to bolster its loyalty program.

Strategic Moves in a Competitive Landscape

CEO Bob Jordan stated that these changes are intended to align with current and future customer needs while appealing to new segments that the airline previously did not cater to. Over the years, however, financial pressures have forced Southwest to reconsider its customer-friendly pricing strategy.

As part of broader changes, the airline is also introducing a new basic fare option that is designed to be the cheapest but comes with limited flexibility. This is indicative of the competitive pricing strategies emerging in the industry, as Southwest seeks to revitalize its appeal while increasing profitability.

A Move Away from Open Seating

In tandem with the introduction of these fees, Southwest will begin offering assigned seating, a concept the airline has maintained for over five decades. Starting in the second half of 2025, reservations will implement assigned seating and premium options, aiming to create additional revenue streams through enhanced seating choices.

Southwest Airlines is faced with navigating a complex financial landscape, including economic uncertainties that have recently impacted its revenue forecasts. The company previously pulled back its projections for 2025 earnings due to market volatility caused by various factors.

As the airline transitions to these new policies, the challenge remains to attract and retain a diverse customer base while adapting to the evolving demands of the travel market.