New York
Cnn
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Months after rejected her open upholstery policy, the Southwest Airlines is ending her most popular receipts: free checks.
The airline will begin to accuse of the first and second controlled bag that begins on May 28, announced on Tuesday in the southwest. However, members of his List A loyalty program, its branded credit card holders or those traveling with a business fee will be exempt from tariffs.
“We have a tremendous opportunity to meet the current and future needs of clients, to attract new segments of clients that we do not compete for today and return to the benefit levels we and our shareholders expect,” said Bob Jordan, Southwest CEO, in a press release.
It is a seismic shift for the southwest, which has always offered free -controlled bags since the start of the airline some 60 years ago and held politics in the country when its competitors began to increase and increase fees. In fact, the carrier has the trademark “bags fly free” Slogan and has been a major part of his advertising.
Jordan told investors in an analyst call last year that there were no plans to start charging the first two bags to be searched. He said no fee for the first two bags is “a large part of what attracts people to the southwest”.
“After the tariff and schedule, the bags fly for free are quoted as the number one issue for why clients choose the southwest. So it’s not something under consideration,” Jordan said at the time.
He also said it has costs, and not just income, coming from loading for bags. Slows the time it takes to load a plane as passengers take more time to look for space in the upper bins for carrier bags. Also, some bags should be moved from the cabin to holding loads as there is no longer any room available in the upper bins.
However, his view changed as Southwest began to sell tickets through third -party websites, such as Kayak or Google Fights, which showed that customers were choosing the price, no matter how generous southwest policies were. Plus, hiring new drivers from other airlines that already upload for the bags “further prove” the change, Jordan said.
“All these initiatives are new to the southwest, but they are not new to the industry,” Jordan said a conference of investors on Tuesday. He added that the changes “are exactly what our employees want to do.”
The southwest did not immediately discover how much the controlled bags will cost. Regardless of the price, it is likely to strengthen at the end of it because the southwest has two to three times more controlled bags than other airlines.
Despite not accusing the first two checked bags, southwest collected $ 73 million in luggage fees in 2023, and $ 62 million in the first 9 months of 2024, according to the statistics of the Transport Department. However, this is part of the baggage fees collected from other airlines, with the American Airlines collecting $ 1.4 billion in 2023, while United Airlines withdrew $ 1.2 billion and Delta Air Lines collecting $ 985 million.
“While this can alienate some customers, other airline peers have tariffs today,” Jeff Windau, an analyst in Edward Jones, wrote in a note. “As long as the southwest holds competitive prices, we do not anticipate a significant loss of customers.”
Competitors withdrew from the news, including CEO of Delta Ed Bastian, said at a conference of investors on Tuesday that the southwest decision to load on bags could be aid to his rivals.
“Clearly there are some clients who chose them because of this (the bags fly free politics),” Bastian said. “Now clearly those clients are ready for catching.”
United General Director Scott Kirby also predicted that other airlines, including United, are likely to see profits due to the southwest decision because it was one of the things that made the southwest, especially among the passengers of affordable sleep.
“It will be good for everyone else,” he said. “The killing of a sacred cow is said. I see it as a great job. “
Southwest shares (luv) increased more than 6% in Tuesday’s trade.
Southwest has introduced a number of changes since Elliott’s investment management took a $ 1.9 billion share in the carrier last year. The activist investor called for leadership changes and an adjustment of operations to increase benefit.
Other signs that has changed the southwest include its cabin. The designated carpets will soon be introduced, as well as the premium sites, bringing it in accordance with traditional carriers. The airline also wrapped red -eyed flights.
Southwest said clients were gathering for those changes. When people move to a competitor from southwest, the company said the reason for the passengers quote is open upholstery. But the change will also help the company load some more passengers for their tickets.
The airline has also changed the way tickets sells. Traditionally she only sold them to southwest.com, but recently said they would sell them in Expedia in an effort to attract more clients.
Southwest also announced Tuesday that it will also begin selling the “Basic Economy” fees in May, which are low -priced tickets but with tons of restrictions.
Last month, Southwest shorten 15% of its corporate workforce, or 1,750 people – the first mass holidays in the company’s history. The extension will save $ 210 million this year and $ 300 million in 2026.
The company started the year with a new financial official, Tom Doxey, who was recently president of Breeze Airways. The former Southwest financial official Tammy Romo and leading administration official Linda Rutherford will withdraw from their positions in April.