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Southwest's Bold Move: Engine Change for Survival
21 Jul
Summary
- Southwest ended its free checked bag policy in March 2025.
- Fees now range from $45 for the first bag to $55 for a second.
- The change aims to ensure the airline's long-term sustainability.
Southwest Airlines underwent a significant business model transformation, notably ending its "Bags Fly Free" policy in March 2025. This strategic shift, characterized by an executive as "changing the engine in the car," was deemed necessary for the airline's long-term sustainability and survival.
The airline began charging for checked luggage on May 28, 2025, with initial fees set at $35 for the first bag and $45 for a second. Less than a year later, these fees were increased by $10 due to rising oil costs, making the current charges $45 for the first bag and $55 for the second, totaling $100 for two checked bags.
Southwest's Executive Vice President, Tony Roach, speaking at Fortune's COO Summit, emphasized that these bold changes are crucial for the brand to remain sustainable while adapting to the changing airline landscape. The move away from free checked bags and the earlier abandonment of its open-seating policy are key components of this strategy to enhance profitability and competitiveness.
