End of an era: Southwest to end two-free bag policy per flight
Southwest Airlines, the world’s largest low-cost airline, has announced the end of its two-bag free allowance policy, making it the last U.S. carrier to offer this courtesy to its passengers.
It’s one of the biggest changes to the company’s services since it first flew nearly 54 years ago. Under the new policy, tickets purchased after May 28 of this year will no longer be entitled to two free bags, which must be purchased at the time of purchase.
Passengers with a Southwest credit card and those who are Elite and eligible for A-List will receive one free checked bag, while A-List Preferred passengers will keep two free bags per flight.
The decision to charge for checked bags has been a topic of discussion among top U.S. aviation executives. Delta Air Lines said the end of its free baggage policy will prompt Southwest passengers to seek alternatives.
Scott Kirby, CEO of United Airlines, was more blunt: “The murder of the sacred cow,” because the company claims that its foundations with customers are: on-time flights, cheap tickets and two free bags, to the point of putting the slogan “Two bags fly free” on its website.
Southwest’s stance comes on the heels of asset manager Elliott Investment Management’s purchase of 11% of the airline last year.
Elliott is known for being a “vulture fund,” which sees opportunities in high-risk businesses that can generate good returns. The fund was one of the largest holders of Argentine public debt in the past.
The fund has been pressuring the airline to find ways to improve its financial performance, such as ending free seat selection and the first mass layoffs in its history. However, by following the same strategies as its rivals, Southwest could lose the attractiveness that made it the largest domestic carrier in the United States.
Last year, during a presentation to investors, the company was emphatic that the gains of US$1 billion in checked baggage would not cover the loss of US$1.8 billion in market share. Southwest even stated that the free baggage policy generates market share gains compared to the policy of charging for them.
With the exception of 2020 and 2021 due to the pandemic, Southwest Airlines has never had an annual loss since 1973, despite the drop in profits in recent years, due to competition with full-service carriers (American, Delta and United) and ultra low-cost carriers (ULLC) such as Spirit and Allegiant and jetBlue, which was inspired by Southwest’s business model.
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