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Yahoo
5 days ago
- Business
- Yahoo
Why Southwest Airlines Stock Climbed by More Than 5% Today
The company made a significant change to a long-standing policy. This creates a new revenue stream for the carrier, however. 10 stocks we like better than Southwest Airlines › A new pricing regime was the wind lifting Southwest Airlines (NYSE: LUV) stock on Tuesday. On the news that the company is falling in line with a current standard in the airline industry, investors lapped up its shares, to the point where they closed the trading day more than 5% higher in price. That compared most favorably to the benchmark S&P 500's (SNPINDEX: ^GSPC) barely over 2% gain. Southwest announced Tuesday it will start levying on its passengers a $35 fee for one checked bag, and $45 for a second. Customers that hold Business Select or Choice Extra premium tickets can check two bags for free, while its A-List and Rapid Rewards credit card holders will be allowed to check one free of charge. The airline carrier is wasting no time implementing this new policy. It added that it will come into force on Wednesday, as it is to apply to flights booked for that day or afterward. This did not come out of a clear blue sky; Southwest announced it would start charging for checked bags back in March. At that time, however, it didn't specify the fees. The move is in line with a long-tail trend with airlines, which have been attempting for years to draw revenue from non-ticket fees. Many flyers opt for the cheapest tickets they can find to a destination; hence the desire by carriers to supplement ticket revenue. Southwest's new bag fees were likely inevitable, given the company's disappointing financial performance recently. It remains to be seen whether the demise of its long-admired free bag check policy will lead to a defection in regular customers. I wouldn't imagine so, as travelers tend to grudgingly accept new fees such as this if their overall flight costs remain comparatively modest. Before you buy stock in Southwest Airlines, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Southwest Airlines wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Southwest Airlines. The Motley Fool has a disclosure policy. Why Southwest Airlines Stock Climbed by More Than 5% Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
7 days ago
- Business
- Yahoo
Southwest announces its new baggage fees for checked bags
After more than 50 years, Southwest Airlines' "bags fly free" policy is finally coming to an end. Southwest on Tuesday announced the first checked bag will cost $35, while a second checked bag will cost $45. The policy will begin tomorrow, when some passengers may be subject to a checked bag fee when booking a flight on the discount carrier. Weight and size limits for bags will apply. The new policy only applies to flights booked on May 28 or later, which means today is the last day to book if passengers want to avoid the new fee. There are, however, some carve-outs to the new policy: Business Select/Choice Extra and A-List Preferred customers will receive two free checked bags, while A-List and Chase Rapid Reward credit card members will get one free checked bag. In addition to the checked bag fees, a new flight credit policy will also take effect tomorrow, affecting how long Southwest customers can use their travel vouchers. Flight credits issued May 28 or later will expire in six months or a year, depending on the fare type. This marks a change to the airline's previous policy in place for three years, which had said flight credits never expire. The airlines stock price was up 2.1% in pre-trading. Southwest announced the end of its free bag check policy in March amid mounting pressure from activist investors to improve its financial performance. The airline in September predicted that the change would lead to $1.5 billion a year in revenue but said it also stood to lose $1.8 billion in business from loyal customers who flew Southwest because of its unique baggage policy. The new checked bag policy is part of a broader set of changes announced by Southwest. The airline said last July that it would start selling assigned seats, a major departure from its longstanding open seating policy. In April, the airline gave customers their first glimpse of what new seating options would look like when it announced its new fare structure. As part of the offerings, customers will now be able to pay for extra legroom. Customers can start booking the new fare bundles in the third quarter of 2025 for flights that depart in 2026, according to the airline. Trump delivers Memorial Day remarks at Arlington National Cemetery Elon Musk says Trump's "big, beautiful bill" undermines work of DOGE team SpaceX loses contact with its Starship, spins out of control Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Newsweek
7 days ago
- Business
- Newsweek
Southwest Checked Bag Fee, Policy: What to Know as Prices Change Tomorrow
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Southwest Airlines has updated its checked bag policy, and passengers will start paying extra tomorrow. Why It Matters Southwest has long allowed passengers to bring a guaranteed free checked bag, but that is changing tomorrow as the airline adopts a new policy. Airlines have faced headwinds in recent years due to larger economic uncertainty. Tariffs, shifting demand and higher jet fuel prices have all forced airlines to make changes to their business models, potentially leading to higher prices for consumers. A Southwest Airlines Boeing 737 taxis at Ronald Reagan Washington National Airport on May 16, 2025 in Arlington, Virginia. A Southwest Airlines Boeing 737 taxis at Ronald Reagan Washington National Airport on May 16, 2025 in Arlington, To Know Southwest Checked Bag Fee Beginning Wednesday, Southwest passengers will no longer get two guaranteed free checked bags when purchasing a flight. That prior rule is disappearing as the airline starts charging fees for checked bags for the first time ever. The first checked bag will cost $35, while the second checked bag will incur a $45 charge for most tickets. Higher costs will apply to overweight and oversized bags. Southwest Baggage Policy Southwest opted to switch its baggage policy as it makes larger business changes. The airline will also no longer allow passengers to self-select their own seats. There will also be added legroom for flyers. How to Still Get Free Bags on Southwest Customers may be able to skirt around the new baggage fee if they qualify for specific perks or rewards under Southwest. That includes Rapid Rewards A-List Preferred Members and customers traveling on Business Select or Choice Extra fares. This will allow you to still get your two free checked bags. Rapid Rewards A-List Members and Rapid Rewards credit card holders also get one free checked bag. What People Are Saying A Southwest spokesperson told Newsweek: "Southwest will be charging $35 for a first checked bag and $45 for a second checked bag (weight and size limits apply) for flights booked or voluntarily changed on or after May 28." Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "There's a running joke: if you want to become a millionaire, have a billionaire invest in an airline. I say that tongue in cheek, but it reflects a deeper truth. This industry is going to continue consolidating. Airlines will cut routes, cut costs, and push profitability as far as they can." Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "For many longtime Southwest flyers, the changes coming this week seem unfathomable. The airline has for decades prided itself being fee-free when it came to bags as many of its rivals started charging for them years ago... The online chatter was highly negative when the changes were first announced, with many claiming they would abandon Southwest. At the same point, talk doesn't always equate to business. It will be interesting to see if the initial angered feedback results in fewer profits moving forward." What Happens Next In February, Southwest Airlines said it would be laying off 1,750 employees for the first time in 50 years. Thompson said more layoffs and higher prices are likely ahead for the airline industry. "Expect activist investors to push changes the original founders never would've touched. We're already down to a few major carriers and if this trend holds competition will shrink as passengers end up paying more for less," Thompson said.
7 days ago
- Business
Southwest Airlines to start charging checked bag fee this week
The era of free checked bags while flying Southwest Airlines is coming to an end. Starting on Wednesday, the Dallas-based carrier will charge customers $35 for their first checked bag and $45 for their second checked bag. The bag fee change will also apply to existing flight itineraries changed on or after May 28, Southwest confirmed to "Good Morning America." Southwest, which previously announced the change in March, said the checked bag fee will put the airline in line with "with industry standards" and hopes the move will boost business. To travel with free checked bags moving forward, Southwest customers will have to be preferred members of the airline's Rapid Rewards A-List program or traveling on Business Select or Choice Extra classes. A-List members and Rapid Rewards credit card members will also get one free checked bag, according to Southwest. Southwest will also begin offering a cheaper Basic fare starting May 28. Checked bag fees will apply to Southwest's Basic, Wanna Get Away Plus, and Anytime fares from Wednesday onward, the carrier said, but not to passengers traveling on Southwest via partner carriers. Previously, Southwest offered passengers the opportunity to travel with up to four bags – first carry-on bag, second carry-on bag or personal item, first checked bag, and second checked bag – at no extra cost.
Yahoo
27-05-2025
- Business
- Yahoo
All Bags Will No Longer Fly Free on Southwest Airlines, Starting Tomorrow
Southwest Airlines will end its decades-long "two bags fly free" era for new bookings beginning tomorrow. The new fees of $35 for a first checked bag and $45 for a second will apply to Southwest's Basic, Wanna Get Away Plus, and Anytime fares. Rapid Rewards A-List Preferred Members and customers traveling on Business Select or Choice Extra fares will still receive two free checked bags. Standard A-List Members and Rapid Rewards Credit Cardmembers will get one free bag. The change is one of a series Southwest has announced over the past year amid activist investor Airlines' (LUV) decades-long "two bags fly free" era is coming to an end tomorrow. The carrier will begin charging certain customers $35 for their first checked bag and $45 for their second on flights booked starting Wednesday, a company spokesperson said in a statement. The change—which brings Southwest in line with domestic competitors Delta Air Lines (DAL), United Airlines (UAL), and American Airlines (AAL)—comes amid pressure from activist investor Elliott Investment Management to raise revenue. In addition to the bag fees, Southwest on Wednesday is introducing a basic economy ticket option, which the airline describes as its lowest price point but least flexible tier. The new bag fees apply to Southwest's Basic, Wanna Get Away Plus, and Anytime fares. Rapid Rewards A-List Preferred Members and customers traveling on Business Select or Choice Extra fares will still receive two free checked bags. Standard A-List Members and Rapid Rewards Credit Cardmembers will get one free bag. Southwest last summer announced it would be ending its famed open seating policy, later adding that "reservations for flights with assigned seats are expected to start in the second half of 2025 for flights operating in 2026." Shares of Southwest rose 3% soon after markets opened Tuesday. The airline's stock has fallen about 5% in 2025. Read the original article on Investopedia
