Baggage handlers loaded 737 luggage at Austin-Bergstrom International Airport in Austin, Texas on August 24, 2024.
Kevin Carter | Getty Images News | Getty Images
It is happening: Southwest Airlines Passengers will begin to charge for the first time bag inspection.
This is an amazing reversal Make it unique From his competitors for more than half a century Increase income.
Southwest Airlines changes take place after months of pressure from activists Elliott Investment Management. The company had a seat on the airline last year and won five board seats Promote quick changes So far, the company has been with the company for decades until now – enjoying the benefits of free check bags, change of tickets and open seating.
For tickets purchased on or after May 28, Southwest customers will have to pay for check bags for everyone except the top-level fee classes, although there will be exceptions. Elite Flyers with the “A-List Preferred” status will still receive two bags, while members of the A-level level will receive a free inspection bag. Southwest credit card holders will also receive a free check bag.
“Two Bags Free” is a registered trademark on the Southwest website. But its decision to revitalize executives’ long-standing behavior as god-sponsored passengers has brought the U.S.’s largest domestic carrier to its competitor, which collected $5.5 billion from the bag last year, according to federal data.
Southwest executives have long said they don’t intend to charge for bags, telling Wall Street analysts that this is the main reason customers choose airlines.
“After the fare and timeline, bag freedom is considered the first phase in terms of customer choice in the Southwest,” CEO Bob Jordan said in his graduation call last July.
But the Southwest changed the tune.
“What has changed is that we have realized that we need more revenue to cover our costs,” Ku Andrew Watterson said in an interview with CNBC. “We believe that these changes we announced today will lead to less changes in that share shift than otherwise.”
In September, then-chief transformation officer Ryan Green, Southwest, told analysts that its analysis showed that if passengers start defecting to competitors, the Southwest would lose more money. Payment bag More than earned from fees.
“The fact that free packages are the key driver of choices creates risks for customers to choose competition policies,” he said.
Southwest said last month A way to separate With green.
The original Floyde searched for a friend’s suitcase in Denver International Airport’s Southwest Airlines luggage at Denver International Airport on December 28, 2022.
Michael Ciaglo | Getty Images
Other changes
The airline also said Tuesday it will launch new basic economic fares, which rivals have offered for years.
Additionally, the Southwest will change the way customers get quick rewards: depending on the amount they pay, customers will earn more frequent flyer miles. The redemption rate will vary based on flight requirements, and the dynamic pricing model uses the competitors.
The flight credit for tickets purchased on or after May 28 will be one year or earlier, depending on the type of fare purchased.
This is the latest in a series of large-scale strategic changes in the Southwest as its performance lags behind its competitors.
Last July, Southwest Airlines announced it would abandon its passengers Open seating model For allocated seats and adding “premium” extra legroom options, ending up decades of single-level cabins.
The airline also hopes to cut its costs. The higher fees of the pandemic took a bite from the airline margins.
Last month, Southwest announced The first quality layoffwith about 15% of the company’s employees layoffs with about 1,750 staff, many of which are at its headquarters, Jordan, a decision-making CEO, was called “unprecedented” in the operator’s flight.
“We are at a critical moment when we turn Southwest into a slimmer, faster, and more agile organization,” he said last month.
Earlier this year, Southwest announced it would retire. Tammy RomoReplaced by Breeze executive Tom Doxey and his chief executive Linda Rutherford. Two executives have worked in the Southwest for more than 30 years.
The Southwest has also been cut Unprofitable routeSummer internships and employee team building activities have been around for decades.
