Southwest Airlines Abandons Signature "Bags Fly Free" Policy After Six Decades

The policy change comes just months after Southwest revealed plans to abandon its open seating system, signaling a complete transformation of the airline's traditional business model that has set it apart for nearly 60 years.

"We have tremendous opportunity to meet current and future customer needs, attract new customer segments we don't compete for today, and return to the levels of profitability that both we and our shareholders expect," said Southwest CEO Bob Jordan in the announcement.

The decision represents a stunning reversal from Jordan's previous stance. During an analyst call last year, he emphasized that free checked bags were "a big part of what attracts people to Southwest" and "not something under consideration right now." The airline had even trademarked the "bags fly free" slogan as a cornerstone of its marketing identity.

While Southwest hasn't revealed the new baggage fees, certain travelers will be exempt, including A-List loyalty program members and business fare passengers. Even without widespread baggage charges, Southwest collected $73 million in baggage fees in 2023, though this pales in comparison to competitors like American Airlines ($1.4 billion), United ($1.2 billion), and Delta ($985 million).

The announcement sent Southwest shares soaring more than 9% in premarket trading, while competitors saw opportunity. Delta CEO Ed Bastian remarked that Southwest customers who chose the airline for its free baggage policy "are now up for grabs."

This policy shift is part of a broader transformation following activist investor Elliott Investment Management's $1.9 billion stake in the airline. Other recent changes include:

• Plans to introduce assigned seating and premium seats

• Introduction of red-eye flights

• New "basic economy" fares launching in May

• Expanded ticket distribution through Expedia

• Corporate workforce reduction of 15% (1,750 jobs) - the first mass layoffs in company history

As Southwest increasingly resembles traditional carriers, it marks the end of an era for the once-maverick airline that built its reputation on doing things differently.