For years, Southwest Airlines has stood out for its customer friendliness and offers two free checked bags. In a huge policy shift, however, the airline is expected to start charging baggage fees starting May 28, 2025. The decision represents a huge departure from its usual business model and is raising concern at how an exodus of customers and loss of brand identity might emerge.
What Are Southwest Airlines Baggage Fees?
The main problem in this decision is financial. Elliott Investment Management, which has taken up a substantial stake in the airline, is forcing changes to make the airline more profitable. Traditionally, Southwest has fought back against charging for checked bags, but now sees such revenue potential. According to estimates, baggage fees could generate $1.5 billion a year. But analysts worry that this will also cost the airline as much as $1.8 billion of lost customers in alienating its loyal base.
New Fare Structure and Who Will Pay for Checked Bags
Not only is Southwest rolling out a new fare package with the introduction of baggage fees, but the airline will begin dynamic, rather than fixed, pricing to its Heart passengers. But only those Business Select passengers, elite frequent flyers, and Southwest credit card holders will still get a free checked bag. Southwest will have to charge other passengers, which puts it in line with the airline industry practices of Delta, American, and United. Neither has the airline officially announced pricing, and fees are expected to begin at about $35 a bag, on average in the industry.
Southwest’s Identity Crisis: Becoming Like Its Rivals?
Southwest has for decades courted the affection of its customers with the promise of being the anti-airline, the friendly face of air travel that charges extra for nothing. Southwest was também known for its gratis checked bags, open seating policy, no change fees, and clear fare structure.
The major shifts include:
- Checking bags for the majority of passengers
- Offering a “Basic Economy” fare with big restrictions
- Ending unlimited flight credits except that will only be good for six months for Basic Economy and one year for other fares
Instead of the traditional open seating model, it helps to implement assigned seating.
The changes are worrying because it will make it hard for Southwest to differentiate itself from its rivals. The airline would be at risk of losing customer loyalty if it did not have unique perks.
Customer Reaction and Potential Backlash
Southwest has been the one airline customers have loved for its simple pricing and no hidden fees. Many now fear these changes will merely render the airline just another option of the legacy carriers. Taking key differentiators out of your brand can wear on the brand, marketing experts warn. Southwest executives claim that despite all the changes, the airline’s culture and service will keep it apart, but people often choose their travel based on tangible matters like price, convenience, and fees.
However, social media and travel forum responses indicate many longtime Southwest passengers are fed up with these changes. Already some frequent flyers have expressed their intentions of looking for other airline options that would give them a better premium experience. However, if the changes that Southwest has made do not deliver better service or some added value, it puts enormous risks of it losing a large section of its loyal customer base.
Financial Considerations: Short-Term Gain vs. Long-Term Risk
From a financial perspective, Southwest is gambling that the extra revenue from baggage fees and other policy changes will improve what could be a small loss in customers. Yet, past experience shows that when brands disavow their central differentiators it can be difficult for them to remain ahead of the pack.
Southwest’s previous success was based on being simple and, at the time, customer-friendly, compared to its larger rivals. Now, by standardizing with practice in the industry, it has now moved into direct competition with carriers with larger route networks and established premium offerings.
