Southwest Airlines is requesting a check bag for the first time

It’s happening: Southwest Airlines Start billing passengers to check their bags for the first time.

It’s a spectacular reversal that shows that low-cost pioneers are willing to let go of their clients’ perks.

The Southwest change comes after months of pressure from activist Elliott Investment Management. The company took stock in the airline last year, earning five board sheets, and wanted a quick change in the company.

For tickets purchased after May 28th, Southwest customers will have to pay for all customers except first-class fare classes to check their bags, with exceptions. Elite Frequent Flyers that hold A-list priority status will continue to get two bags, while A-list level members will get one free check bag. Southwest credit card holders will also get one free check bag.

“Two Bags Fly Free” is a registered trademark of the Southwest website. However, federal data shows that the decision of executives cast as Saxan passengers to cast as Saxan parks will win the largest U.S. domestic airline alongside their rivals and generate more than $5 billion in bag fees last year.

Southwest didn’t say how much bill they plan to check their bags, but one bag costs $35 to check Delta, America and United.

Southwest shares rose 8% on Tuesday after baggage fee announcements and investor updates, but stocks from other large airlines and broader markets fell.

Southwest executives have long told Wall Street analysts they didn’t plan to bill their bags, telling them that they were the main reason their customers chose the airline.

On Investor’s Day in September, Southwest said it would increase between $1 billion and $1.5 billion from the bag’s bill, but would lose $1.8 billion in market share. Southwest found that “strength research” found that our “free bag” policy generates an increase in market share beyond potential lost revenue from bag fees.

Executives from some airlines are seeing opportunities.

“Obviously, I think there are customers (which chose the Southwest) for that, but now they have got one.” Delta Air Lines President Glenn Hauenstein said at an investor meeting Tuesday after Southwest’s announcement. “We continue to implement multiple changes to our products, so we’ll see how it unfolds over the next period.”

United Airlines Speaking at the same meeting, CEO Scott Kirby likened Southwest’s baggage policy changes to “sacred cow killing,” saying low-wage customers are the most affected.

“I think it’s a big deal because I feel it’s more economically driven. It’s a more outcome-driven airline than ever,” he said.

Southwest CEO Bob Jordan cited the company’s long-standing bag policy in a revenue call last July.

“After fares and schedules, Bag Fly Free is cited as the number one issue in terms of why customers choose the Southwest,” Jordan said.

But Southwest changed the song.

“What’s changed is that we realised we needed more revenue to cover the costs,” COO Andrew Watterson said in an interview with CNBC about the baggage fee changes. “We believe these changes we are making today will have less share shifts than they would otherwise.”

Jordan said Tuesday that the new baggage policy would likely help drive co-branded credit card sign-ups, making sense for its commercial reach and posting tickets on external platforms. Google Flight and Expedia.

“In contrast to previous analysis, actual customer booking behavior through new booking channels such as Metasearch did not show that they were earning the same benefits as products bundled with free bags.

Jordan said the carrier has new executives who say “have first-hand experience in implementing bag fees on multiple airlines, which will help further test new assumptions.”

Southwest said the changes announced Tuesday would add $800 million in profits before interest and taxes this year, adding $1.7 billion in 2026, increasing 2026 growth, including other initiatives, to $4.3 billion, from the $2.6 billion target it shared by investors’ day in September.

During a September presentation, Southwest’s then-Chief Change Officer Ryan Green told analysts that the analysis showed that if Southwest began charging from fees, passengers had died to rivals.

“The fact that free bags are key drivers for choice creates the risk that changing policies will allow customers to choose to compete,” he said.

Southwest said he broke up with Green last month.

The airline also said Tuesday that it will launch a new basic economic fare that its rivals have been offering for years.

Additionally, Southwest changes the way customers get quick rewards. Customers earn more free carmiles depending on the amount they pay. The redemption rate depends on flight demand and the use of competitors in the dynamic pricing model.

Flight credits for tickets purchased after May 28th will expire one year or earlier, depending on the fare you purchase.

It’s the latest in a series of major strategic changes in Southwest as performance lags behind its rivals.

Last July, Southwest shocked passengers when it announced it was dumping its open seat model for its assigned seating, adding a “premium” extra legroom option, and ending a decades-old single-class cabin.

Airlines are also trying to cut costs. The increased costs coming out of the pandemic are removing a sip from airline margins.

Last month, Southwest announced its first major layoff, cutting employment of around 1,750 people in its corporate staff. Most of them are head offices, Jordan, the decided CEO who has been called “unprecedented” after more than 53 years of flight.

“We are in a pivotal moment as we transform Southwest Airlines into a more lean, faster, more agile organization,” he said last month.

Earlier this year, Southwest announced the retirement of longtime finance chief Tammy Romo. Tammy Romo was replaced by Breeze executive Tom Doxey and his supreme administrative officer Linda Rutherford. Both executives worked at Southwest for over 30 years.

Southwest has also cut back on unprofitable routes, summer internships and employee team building events that have been held for decades.