Southwest Airlines is ending a free baggage policy that has been a cornerstone of its offer for years. The US budget airline has announced in a press release that instead of allowing all customers to fly with two free checked bags, only business flyers and certain loyalty scheme members will now benefit from the perk.
The new rule means that those travelling on a business fare or A-List members can check their first and second bags for free. Rapid Rewards Credit Card holders will receive one free checked bag, alongside “other select customers.” Everyone else will be charged for all their checked luggage when a new basic fare structure comes into force on 28 May 2025. One small carry-on bag will remain free and will not be charged for when there is no room left in overhead lockers.
“Unprecedented” changes
Charging for checked bags is a turnaround for the carrier that has long advertised its free baggage policy as a unique selling point that distinguished it from competitors. As recently as September 2024 the company calculated that charging for baggage would be counter productive, bringing in revenues of $1.5 billion a year but costing $1.8 billion in lost business as passengers who have flown with Southwest thanks to its bags-fly-free motto turn to other airlines. Delta is already eyeing the space, its President Glen Hauenstein describing previously loyal Southwest flyers as “up for grabs.”
The change comes after Elliott Investment Management hedge funders won places on Southwest’s board in October 2024. A month later the carrier offered its customer service agents, baggage handlers, and cargo workers at 18 US airports “voluntary separation and extended time off”.
That was followed by a decision in February 2025 to make 15% of its corporate workforce redundant, amounting to 1,750 jobs – a move described by Bob Jordan, President, CEO and & Vice Chairman at Southwest Airlines as “unprecedented in our 53-year history.” The layoffs were intended to “transform Southwest Airlines into a leaner, faster, and more agile organization,” a spokesperson said.
Return to profitability?
Now, the transformation to the long-standing baggage policy is being touted as an “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,” Jordan said in a statement.
In addition to charging for checked bags, the airline is changing its open boarding policy and introducing assigned seating and paid-for extra legroom options, which should be in place by 2027.
