Robert Besser
15 Mar 2025

DALLAS, Texas: Southwest Airlines will start charging passengers for checked bags, ending a long-standing policy that set it apart from other airlines.

Previously, Southwest allowed travelers to check up to two bags for free, but now only certain passengers—such as those with elite status in its loyalty program, business class tickets, or airline credit cards—will continue to receive complimentary checked bags. The airline has not yet announced the exact fees, but the new policy applies to flights booked on or after May 28.

Southwest has been struggling financially and is under pressure from investors to increase profits. Last month, the airline announced it would cut 1,750 corporate jobs—about 15% of its workforce—to reduce costs. Southwest's CEO Bob Jordan said these changes would help the company attract new customers and return to strong profitability.

This move comes less than a year after Southwest announced another significant change: ending its long-standing open-boarding system. By next year, the airline will assign seats like most of its competitors.

Southwest estimated last year that charging for checked bags could bring in US$1.5 billion annually, but it also expected to lose about $1.8 billion from customers who previously chose the airline for its free baggage policy. However, airline executives believe the added revenue will outweigh any lost business.

Southwest's decision has created an opportunity for competitors. Delta Airlines President Glen Hauenstein noted that some travelers picked Southwest because of its free bags, and now they may switch airlines.

The airline industry is also facing challenges from a slowing economy and a trade war that is affecting market confidence. Delta's shares have tumbled 24 percent this year, United's by 22 percent, JetBlue by 27 percent, and American Airlines by a whopping 32 percent. On March 11, Southwest lowered its revenue expectations, projecting slower growth than previously forecasted.

To remain competitive, Southwest is making several other changes, including offering extra legroom seats, red-eye flights, and a new basic fare option for budget travelers.