Southwest's Overhaul: New Bag Fees, Seating Changes – What's at Stake

Skift

27-05-2025

Southwest's most iconic perk ends Tuesday. While Southwest has received flak from customers, executives hope bag fees will shore up profitability.
A beloved perk among Southwest customers is coming to an end on Wednesday: No more free checked bags.
Soon, it will cost customers $35 for a first checked-in bag and $45 for the second.
Southwest made the monumental decision to charge bag fees in March following a series of other major changes to its business model. Bag fees had long been one of Southwest's biggest differentiators from other airlines, and executives at the company had stressed that the policy was beneficial to Southwest's bottom line.
'We're not looking at this point to change that policy," Southwest CEO Bob Jordan said during an earnings call last July. "Our industry-leading set of initiatives of customer-friendly policies, and you know the list, is a big part of what attracts people to Southwest Airlines. And after fare and schedule, bags fly free is cited as the #1 issue in terms of why customers choose Southwest."
The decision to start charging bag fees was met with pushback from customers, but Wall Street and airline executives welcomed the news: Analysts for the potential revenue boost, other airlines for competitive reasons (Delta president Glen Hauenstein said Southwest customers would now be 'up for grabs.')
What Is Changing at Southwest?
Southwest will officially start charging for two checked bags on Wednesday. Customers who book Southwest flights on Tuesday will not be charged for checked bags, regardless of the travel date, according to a spokesperson for the company.
The first checked bag will cost $35 and the second will cost $45.
Who Do Bag Fees Apply to?
The baggage fees apply to those flying basic economy, along with Southwest's Wanna Get Away Plus and Anytime fares.
Customers who are flying on Business Select or are Southwest Rapid Rewards A-List Members will still be able to check in two bags for free. A-List members and Rapid Rewards credit cardholders will receive one free checked bag.
Southwest will also start selling basic economy fares on Wednesday, replacing its Wanna Get Away fare. Customers cannot make free changes or receive same-day standby tickets with the basic economy fares.
What About Assigned and Premium Seating?
Another set of major changes coming to Southwest is assigned seating and premium seating. The carrier was long known for its open boarding process, but executives said that they found customers preferred an assigned boarding process and the option to book premium seats.
Southwest expects to start operating flights with assigned seats in 2026 and will also start charging seat selection fees. Premium seats will be denoted by a light blue top and will also have deeper cushions and longer headrests.
Why Is Southwest Making These Changes?
Much of these sweeping changes come after Southwest's bitter battle with activist investor Elliott Investment Management, which had built a nearly $2 billion stake and won five seats on the company's board. The hedge fund had advocated for major leadership changes at Southwest, along with bag fees, assigned boarding and premium seats.
Southwest also conducted its first-ever layoffs in February, slashing 15% of its corporate workforce.
Ending its two bags fly free policy is a risk for Southwest. When the news first became public in March, customers took to social media to express their displeasure with the change. Since the announcement, most of Southwest's social media posts are filled with customers complaining about the recent changes.
Southwest also hasn't posted anything about bag fees on its social media since the announcement.
However, during Southwest's most recent earnings call in April, chief operating officer Andrew Watterson said the company had not seen a dip in bookings.
Executives at the company argue that these changes are necessary for Southwest to remain competitive and shore up its profitability. More airlines have recently started increasing their baggage fees, citing inflation and rising operating costs. Airlines also raked in $7.3 billion from baggage fees in 2024, according to the Bureau of Transportation Statistics.
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