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Events / Business / Southwest Airlines Ends Free Bags Policy
Business policy change

Southwest Airlines Ends Free Bags Policy

Analysis based on 7 articles · First reported May 26, 2025 · Last updated May 27, 2025

Sentiment
20
Attention
4
Articles
7
Market Impact
General
Live prominence charts, article sentiment distribution, and event development timeline available on the Ergen Dashboard
Market Impact

The changes by Southwest Airlines, particularly the introduction of baggage fees, are expected to boost its revenue and profitability, aligning it with competitors like American Airlines, United Airlines, and Delta Air Lines. This could lead to increased investor confidence in Southwest Airlines, while potentially impacting customer loyalty due to the departure from a long-standing free perk.

Airlines
Event Summary

Southwest Airlines is ending its 'bags fly free' policy, a hallmark since 1967, and will begin charging $35 for the first checked bag and $45 for the second, effective May 28 for new bookings. This move, announced in March, aims to boost revenue and cut costs, following a net loss in the first quarter. Exceptions apply to Business Select fares, high loyalty status members, and Southwest Airlines co-branded credit card holders. The new fees align Southwest Airlines with other major U.S. airlines, which collectively earned billions from baggage fees in 2024. Southwest Airlines CEO Bob Jordan and CFO Tom Doxey have indicated these changes are part of a broader effort to improve profitability and address misalignment with industry practices. Other changes include plans to introduce assigned seating in 2026 and the rollout of 'basic economy' fares, replacing the 'Wanna Get Away' option. These strategic shifts come amid pressure from activist investor Elliott Investment Management, which took a significant stake in Southwest Airlines last year.

Key Actions
100 Southwest Airlines began charging
80 Southwest Airlines rolled out
70 Southwest Airlines did away with
50 Elliott Investment Management pressured Southwest Airlines
40 Southwest Airlines began selling tickets Expedia Group
Entities Involved
stock
Southwest Airlines
Southwest Airlines is ending its long-standing 'bags fly free' policy, introducing new baggage fees to boost revenue and align with industry practices. This change is expected to improve its profitability.
Importance 100.0 Sentiment 30.0
per
Robert Jordan (disambiguation)
Bob Jordan, CEO of Southwest Airlines, stated that the changes are intended to improve profitability for Southwest Airlines.
Importance 60.0 Sentiment 20.0
per
Tom Doxey
Tom Doxey, CFO of Southwest Airlines, noted the airline's misalignment with the industry regarding bundled features and the need to encourage customers to spend more.
Importance 50.0 Sentiment 20.0
priv
Elliott Investment Management
Elliott Investment Management is an activist investor that took a stake in Southwest Airlines, putting pressure on the carrier to boost profitability.
Importance 30.0 Sentiment 0.0
stock
United Airlines
United Airlines is mentioned as a competitor that already charges baggage fees, earning significant revenue from them, which Southwest Airlines is now emulating.
Importance 20.0 Sentiment 0.0
stock
Delta Air Lines
Delta Air Lines is mentioned as a competitor that already charges baggage fees, earning significant revenue from them, which Southwest Airlines is now emulating.
Importance 20.0 Sentiment 0.0
stock
JetBlue
JetBlue is mentioned as another carrier that charges baggage fees, though with varying structures.
Importance 10.0 Sentiment 0.0
priv
Frontier Airlines
Frontier Airlines is mentioned as another carrier that charges baggage fees, though with varying structures.
Importance 10.0 Sentiment 0.0
stock
Expedia Group
Southwest Airlines recently started selling tickets on Expedia Group to attract more customers.
Importance 10.0 Sentiment 0.0
stock
American Airlines
Importance 0.0 Sentiment 0.0
Relationships
Southwest Airlines competitor ↔ United Airlines Southwest Airlines operates as a direct competitor to United Airlines within the commercial aviation and passenger airli
Southwest Airlines related ↔ Delta Air Lines
Southwest Airlines related ↔ American Airlines
United Airlines competitor ↔ Delta Air Lines United Airlines operates as a direct competitor to Delta Air Lines within the commercial aviation and passenger transpor
United Airlines related ↔ JetBlue
United Airlines competitor ↔ American Airlines United Airlines and American Airlines are major direct competitors in the US and global airline markets, competing for r
Delta Air Lines related ↔ JetBlue
Delta Air Lines related ↔ American Airlines
JetBlue related ↔ American Airlines
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