Southwest Airlines has undergone significant changes in recent months, altering its long-standing focus on providing a comfortable passenger experience. Historically known for differentiating itself through better treatment of passengers, the airline faced financial struggles and an operational meltdown during the 2022 holiday season, prompting a shift in strategy.
Elliott Management, a global activist investment management firm, played a pivotal role by acquiring shares and pressuring Southwest to change. The firm argued that the airline needed to evolve beyond its traditional strategy. Elliott's influence led to significant leadership changes, including the appointment of Rakesh Gangwal as board chairman.
Southwest's major adjustments include modifying its fare structure. Starting May 28th, the airline eliminated its policy of offering two free checked bags to all passengers. Now, only A-List members and Business Select ticket holders retain this benefit. Other passengers face fees for checked bags, which could deter those seeking low-cost travel options.