The end of Southwest Airlines as a brand is Tuesday, May 28th. They begin charging for checked bags on all tickets sold beginning tomorrow. What’s amazing is that they refused to even tell customers what they’d be charging. They were too embarrassed – having built their entire reputation on being a customer-friendly airline, with ‘bags fly free’ as the centerpiece.
| 1st bag | 2nd bag | 3rd+ bag | Overweight/oversize | Effective for tickets issued | |
|---|---|---|---|---|---|
| Southwest (new) | $35 | $45 | $150 each | Up to $200 | 28 May 2025 onward |
The $35 / $45 structure mirrors the prevailing rates at Delta, United, American and Alaska. The path that Southwest has chosen is to ‘be just like everyone else’ walking away from all differentiation. That’s just sad, but it’s what we’ve come to expect.
Southwest is now ‘the same, but less than’. They have basic economy, checked bag fees, and devalued points. But they don’t have first class, lounges, or functional wifi. On those planes with seat power, they have only USB.
Two bags remain free for:
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Business Select customers (all itineraries).
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A-List Preferred elites – two free; A-List – one free.
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Southwest-branded credit-card holders – one free for the cardholder and up to eight people on the same PNR.
If you bought your ticket on or before 27 May 2025, these charges do not apply.
Unbundling And Tax Arbitrage
Southwest checks roughly 2–3 × as many bags per passenger as its largest competitors. Customers value free checked bags. They don’t try to carry all of their life’s belongings onto the plane. That speeds up boarding and helps with on-time performance.
Southwest will find itself gate checking far more bags as bins fill up. This eats up time, and will make the airline less efficient.
Even without charging for the first two, it still booked $83 million in baggage revenue last year; American collected about $1.5 billion. But it’s not as simple as saying Southwest has this as upside.
- Southwest’s fares have included checked bags and are often higher
- Southwest wants to sell competitively through online travel agency sites, and doesn’t want to show higher faces (historically they’ve sold almost exclusively through their own channels, where there was no direct comparison)
- The Biden administration adopted a rule that airline prices had to be displayed inclusive of fees like a checked bag. That would have let Southwest appear competitive without unbundling. The rule was blocked by the U.S. Court of Appeals for the Fifth Circuit.
There’s no expectation that this is a billion dollars of annual upside. However the real gain may come in the form of taxes. Domestic tickets are subject to a 7.5% federal excise tax, but voluntary fees are not. Moving a billion dollars of revenue from the fare into fees nets a $75 million tax savings. Congress is incentivizing Southwest to do this. Really, there should be no differential tax treatment between fares and fees.
The Best Approach Going Forward
If you’re in a competitive city, reconsider flying Southwest. They no longer offer a differentiated product. If their schedule and price make them compelling, despite the product, just know what you’re getting into.
To the extent you live in a predominantly Southwest city (they are the largest carrier at my home airport) then a Southwest co-brand credit card may make sense.
And shift your strategy towards more carry on bags. To start, the airline has said their enforcement of carry-ons will be lax. Consider buying tickets today before the rules go into effect. And be sure not to exceed the 50 pound weight limit. In my experience, when bags flew free, Southwest was the biggest stickler for small weight overages among the major airlines.
- Southwest’s fares have included checked bags and are often higher
Sorry, Herb
…it was fun while it lasted….
I’m confused. Today is Tuesday, May 27. Does it start Tuesday or does it start Wednesday, May 28?
@Gary: The stock price went up.
🙁
I was (notice was) a loyal Southwest user for domestic flights. That ends. I can’t really see how this is going to help, long term, profitability. SW tossed loyalty out the door.
L3 – the stock prices will soon go down, down, down….
I only fly SW when it is the only nonstop in the market, otherwise I chose to fly anyone else but SW. Avoiding the inconvenience and risk of a missed connection is worth it but otherwise, I agree that SW has nothing to distinguish itself from the other airlines and in fact offers much less.
Let. Them. Fail.
What goes up, must come down ….. 🙁
Tuesday is May 27
WN subsidized the travel of hundreds of millions of leisure passengers and got nothing in return.
This isn’t about spite. It is about them competing on the same basis as every other carrier. IN many cases, they have nonstops to leisure destinations which other airlines do not have.
They have their own network of “hubs” largely in airports where other carriers aren’t strong.
Yes, they will struggle in other airline hubs but that has been the case for more than a decade.
The biggest challenge will be the transition when customers will be confused.
and some will be spiteful…
I see chaos coming.
Tim – you are full of crap. Hundreds of millions of passengers helped build the Southwest brand – now, some ignorant bean counters are ruining the brand.
@Tim Dunn — And hopefully those ‘passengers’ remember that it’s not the check-in agent’s fault that this once beloved company was taken over by vulture capitalists. Like, those poor workers deserve ‘hazard pay’ for this ($20/hour is not enough for what’s about to come their way.)
On the routes that I frequently fly, Southwest has often been ludicrously more expensive such that I often forget to even check their flights. Even taking into account that a fare differential may include the “free” checked bag. It will be interesting to see if they now become more processed competitive.
and where exactly are these people going to go?
You act like it is WN’s responsibility – Elliott or not – to subsidize someone’s travel.
No company is responsible for providing a service the company cannot make money providing.
I know it is difficult for you – and Gary – to grasp but WN will compete for passengers just like everyone else.
leisure travelers don’t accrue loyalty points fast enough to matter, they don’t spend enough to get into lounges etc.
WN does offer a credit card that has benefits just like other airlines.
No need to be vindictive or walk away from a company can still compete.. or not.
Let the free market sort it out
and if other airlines benefit, WN will have to react or pay the price.
For a lot of Southwest flyers, it’ll be less about “reconsider flying Southwest,” than it will be “reconsider flying at all.”
Well, another one will bite the dust. Sad to see it go as SW was decent, not great, but good enough.
I hope private equity loses their a&& on this one. They never do, though, it seems.
I truly don’t know why they didn’t start charging bag fees only on the super economy fares and left Anytime fares with free bags. That way they could have claimed their basic product still included free bags, and recouped on the slasher fares.
Awww, did you want them to go bankrupt instead? Sorry you’re not getting free stuff anymore, while those who travel light and don’t check bags get nothing. SWA got all the inexperienced, low value, high cost customers, not a winning formula.
What about all the cargo hold space that will be freed up to sell for cargo?
Don’t worry, you’ll still sort of have their zoo free for all boarding process.
get ready for alot of carry on baggage and packed overhead space. and gate checked bags
Life begins for JetBlue and American tomorrow
That’s where a lot of Southwest passengers are going.
What Joe D said
a couple recollections from the mid-80’s … absent-minded (or a few too many drinks), twice I left my briefcase in a bar at Love Field… called when I landed … Agent put me on hold, “We’ve got it in Lost Luggage, how about I give it to the crew on the next plane headed there, the station manager will call you when he’s got it.” And the evening I was trying to fly back to Dallas with a cooler full of Gulf crabs I’d just caught … Ticket Agent said she had a better idea, went in the back, found some super-heavy-duty trash bags, put the cooler in them, sealed it tight, put a baggage label on it .. “I’ll tell them to put it in the front bin where fragile things go.” Just two of the reasons I was a super-fan of SW. Times change. Elliott makes no secret: they’re going to squeeze every cent SW has, use it to raise the stock price, throw it into Bankruptcy and/or or sell it to Delta. Probably a good excuse to lift a hand tonight and offer a Toast … what a ride its been!
Delta airlines still offer free baggage if you happen to have a credit card from these
The WN brand is done for. It’s over … a once successful company is falling on its sword. What a sad sight to see.
If you thought Southwest’s boarding process was a cluster before, wait until half of the passengers (who are used to checking their oversized bags for free) now attempt to board with a rolling bag within the published size limits: 24” (L) + 16” (W) + 10” (H).
Most of its legacy 737 fleet still have the smaller/original overhead bins which won’t be fully replaced until well into 2026. SWA will eventually be forced to offer an “extreme basic” fare with no carry on allowance (just a personal item).
Good~bye Southwest. Can’t imagine what you’ll now offer to make flying SW anymore attractive than other airlines. Loyalty has become an meaningless word.
One of the sillier comments from @Tim Dunn, “WN subsidized the travel of hundreds of millions of leisure passengers and got nothing in return.”
Southwest was the most consistently profitable airline for decades.
The pandemic accelerated several changes. Customer preferences away from the Southwest model, and away from their route network. They lacked partnerships and long haul and faced higher costs.
Southwest had many problems and to grow they needed to reach new customers but prices weren’t being compared apples-to-apples.
Many real problems especially on a go-forward basis but the idea that Southwest’s policies didn’t give it outsized profits relative to the industry is just silliness.
So is Southwest taking $80 off of each flight for those of us who never wanted to check bags in the first place?
Hearing all the negative predictions for LUV stock, I’m thinking it’s a buy at the $32.52 price at the time of my writing.
Just don’t touch my Companion Pass.
“Southwest was the most consistently profitable airline for decades”
just wasn’t the LAST decade.
You do realize that Delta took that title well before covid, don’t you?
.
“Many real problems especially on a go-forward basis but the idea that Southwest’s policies didn’t give it outsized profits relative to the industry is just silliness.”
for the past five years, WN has not been able to cover its costs including legacy-comparable labor costs and a lack of efficiency which had been WN’s advantage to cover those costs – but which does not exist anymore. WN’s labor costs per ASM are now comparable to the legacy carriers but they don’t have the revenue to cover it.
I’d be willing to bet the C-suite people have some attractive golden parachutes for when they bail out before the losses and the coming stock crash.
If I use my credit card to buy a ticket for my daughter, flying to college alone, does she get a free checked bag?
@ Tim — An idiot, as always.