Luggage holders load luggage over an Airlines Airlines Southwest Boeing 737 at Austin-Bergstrom International Airport on August 24, 2024 in Austin, Texas.
Kevin Carter | Getty Images News | Getty Images
Is happening: Southwest Airlines Will start loading passengers to check bags for the first time.
It is a stunning upheaval that shows that the low-cost pioneer is ready to participate with a customer of the Perk leaders have said it besides rivals in more than half a century of flight in the hope of increasing income.
Southwest changes come after months of pressure from activist Elliott Management Investment. The firm took an action on the airline last year and won five board seats while pushing for quick changes in the company, which kept for decades – so far – to have free -controlled bags, variable tickets and open upholstery.
For tickets purchased at or after May 28, southwest customers across, but the high level of tariff level will have to pay to check bags, although there will be exceptions. Frequent elite flyers holding the “A-List prefred” status will still receive two bags and A-List members will receive a free-controlled bag. Southwest credit card holders will also get a free -controlled bag.
“Two bags fly free” is a trademark registered on the southwest website. But his decision to surround what executives throw long as a passenger Sakros brings the largest US internal carrier in accordance with his rivals, who together generated $ 5.5 billion from the bag fees last year, according to federal data.
Southwest leaders have long said they did not plan to load for bags, telling Wall Street analysts that it was a major reason why customers chose the airline.
“After the fee and the schedule, the bags fly for free are quoted as number 1 publication for why clients choose southwest,” Ceo Bob Jordan said in a profit call last July.
But the southwest has changed its melody.
“What has been changed is that we have realized that we need more income to cover our costs,” Coo Andrew Watterson said in an interview with CNBC for luggage fees changes. “We think that these changes we are announcing today will lead to less change of shares than the case would have been.”
In September, the leading southwest transformation official Ryan Green told analysts that her analysis showed that the southwest would lose more money from the passengers by defecting to rivals if he started charging for bags than he would do from tariffs.
“The fact that the free bag is a main proportion of choice creates the risk for customers to choose competition if we change politics,” he said.
Southwest said last month that she had shared ways with Green.
The pristine floyde requires a friend of a friend in a luggage holding area for Southwest Airlines at Denver International Airport on December 28, 2022 in Denver, Colorado.
Michael Ciaglo | Getty Images
Other changes
The airline also said Tuesday that it would launch a new, basic economy fee, something rivals have offered for years.
In the south -west, in addition, it will change the way clients earn quick rewards: customers will earn more from frequent flight miles depending on how much they pay. Redemption rates will vary depending on the flight requirement, use a dynamic price model that competitors use.
And flight loans for tickets for tickets purchased on or after May 28 will expire one year, or earlier, depending on the type of tariffs purchased.
It is the latest in a series of massive strategy changes in the southwest as its performance has fallen behind rivals.
Last July, Southwest shocked the passengers when announcing that she would plunge her open model for seats for certain places and add additional “premium” foot options, ending decades of a single -class cabin.
The airline is also seeking to reduce its costs. The highest expenses arising from the pandemia have received a bite from the airline borders.
Last month, Southwest announced her first mass break, cutting about 1,750 jobs of approximately 15% of its corporate staff, many at its headquarters, a CEO of Jordan decisions called “unprecedented” in more than 53 years of carrier flying.
“We are at an important moment as we turn the Southwest Airlines into a weaker, faster and more agile organization,” he said last month.
Earlier this year, the southwest announced the retirement of his long finance boss, Tammy Romo, who was replaced by Breeze Executive Tom Doxey, and her administrative chief, Linda Rutherford. Both leaders worked in the southwest for more than 30 years.
The southwest has also cut the unprofitable roads, summer practices and events of the team of employees held for decades.