Southwest Airlines is set to end its long-standing policy of allowing two free checked bags, a strategy that helped distinguish it from competitors. Starting Wednesday, passengers who haven’t reached the upper tiers of the Rapid Rewards loyalty program, purchased business class tickets, or obtained the airline’s credit card will incur fees for checked bags. Rapid Rewards A-List preferred members and those traveling on Business Select can still check two bags free, while A-List members and select others retain the option for one. The airline predicts that introducing bag fees could generate approximately $1.5 billion annually, although they may lose about $1.8 billion in customers who chose Southwest for its free baggage service.
In addition to the new checked bag fee, beginning Wednesday, Southwest will enforce new regulations requiring passengers to keep portable chargers visibly accessible during flights due to increasing concerns regarding lithium-ion battery fires. The airline is also revamping other traditional practices, including the introduction of assigned seating—moving away from its 50-year open-boarding system—expected to be implemented next year. Moreover, Southwest will offer options for extra legroom and red-eye flights, contributing to a broader strategy aimed at heightened profitability and revenue.
Facing pressure from activist investors, Southwest has taken significant steps to streamline operations, including a substantial workforce reduction of 15%, affecting 1,750 employees, marking the first major layoffs in its 53-year history. The airline is undergoing these changes amid ongoing challenges, highlighted by a recent truce with hedge fund Elliott Investment Management over board positions to avert potential conflicts.
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