Last week, Southwest Airlines announced a significant shift in its policy by introducing charges for checked bags, ending its decades-long tradition of offering this service for free. This change comes amid several other policy adjustments following Elliot Investment Management's $1.9 billion stake in the company, as Southwest seeks to enhance profitability under stakeholder pressure. While U.S. airlines collectively earn over $5 billion annually in baggage fees, Southwest has now decided to tap into this revenue stream.
The reaction from customers extends beyond the new checked bag fees. It encompasses a series of recent changes made by the airline, including the devaluation of its points-earning structure and the removal of seat selection options. These developments have significantly impacted customer confidence.
Beginning May 28, 2025, Southwest will charge most customers for their first and second checked bags with standard weight and size restrictions. Exceptions include Rapid Rewards A-List Preferred members (two free bags), Business Select fare customers (two free bags), A-List members (one free bag), and other select customers. Rapid Rewards Credit Cardmembers will receive credit towards one checked bag.