Day Trading Reports
  • Business
  • World News
  • Politics
  • Investing
  • Business
  • World News
  • Politics
  • Investing

Day Trading Reports

Business

Southwest Airlines will charge to check bags for the first time, launch basic economy tickets

by admin March 12, 2025
March 12, 2025
Southwest Airlines will charge to check bags for the first time, launch basic economy tickets

It’s happening: Southwest Airlines will start charging passengers to check bags for the first time.

It’s a stunning reversal that shows the low-cost pioneer is willing to part with a customer perk executives have said set it apart from rivals in more than half a century of flying in hopes of increasing revenue.

Southwest’s changes come after months of pressure from activist Elliott Investment Management. The firm took a stake in the airline last year and won five board seats as it pushed for quick changes at the company, which held on for decades — until now — to perks such as free checked bags, changeable tickets and open seating.

For tickets purchased on or after May 28, Southwest customers in all but the top tier-fare class will have to pay to check bags, though there will be exceptions. Elite frequent flyers who hold “A-List Preferred” status will still get two bags and A-List level members will get one free checked bag. Southwest credit card holders will also get one free checked bag.

“Two bags fly free” is a registered trademark on Southwest’s website. But its decision to about-face on what executives long cast as a sacrosanct passenger perk brings the largest U.S. domestic carrier in line with its rivals, which together generated $5.5 billion from bag fees last year, according to federal data.

Southwest executives have long said they didn’t plan to charge for bags, telling Wall Street analysts that it was a major reason why customers chose the airline.

“After fare and schedule, bags fly free is cited as the No. 1 issue in terms of why customers choose Southwest,” CEO Bob Jordan said on an earnings call last July.

But Southwest has changed its tune.

“What’s changed is that we’ve come to realize that we need more revenue to cover our costs,” COO Andrew Watterson said in an interview with CNBC about the baggage fee changes. “We think that these changes that we’re announcing today will lead to less of that share shift than would have been the case otherwise.”

In September, Southwest’s then-chief transformation officer, Ryan Green, told analysts that its analysis showed Southwest would lose more money from passengers defecting to rivals if it started charging for bags than it would make from the fees.

“The fact that free bags is a key driver of choice creates the risk that customers may choose the competition if we change the policy,” he said.

Southwest said last month that it had parted ways with Green.

The airline also said Tuesday that it will launch a new, basic economy fare, something rivals have offered for years.

Southwest, in addition, will change the way customers earn Rapid Rewards: Customers will earn more of the frequent flyer miles depending on how much they pay. Redemption rates will vary depending on flight demand, a dynamic pricing model competitors use.

And flight credits for tickets for tickets purchased on or after May 28 will expire one year, or earlier, depending on the type of fare purchased.

It’s the latest in a string of massive strategy changes at Southwest as its performance has fallen behind rivals.

Last July, Southwest shocked passengers when it announced it would ditch its open seating model for assigned seats and add “premium” extra legroom options, ending decades of an single-class cabin.

The airline is also looking to slash its costs. Higher expenses coming out of the pandemic have taken a bite out of airline margins.

Last month, Southwest announced its first mass layoff, cutting about 1,750 jobs roughly 15% of its corporate staff, many of them at its headquarters, a decision CEO Jordan called “unprecedented” in the carrier’s more than 53 years of flying.

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

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

Southwest has also cut unprofitable routes, summer internships and employee teambuilding events its held for decades.

This post appeared first on NBC NEWS

previous post
Volcano eruption in Guatemala forces hundreds to evacuate
next post
PDAC 2025: Investment Capital, AI Energy Demand and the Race for Resources

Related Posts

Trump Media sues Brazil Supreme Court judge who...

February 20, 2025

As Joann Fabrics and JCPenney announce store closings,...

February 18, 2025

U.S. homebuilders raise alarm over tariffs as sentiment...

February 20, 2025

Amazon set to pass Walmart in revenue for...

February 7, 2025

Netflix shares soar as company reports surging revenue,...

January 23, 2025

On air, ’60 Minutes’ reporter says ‘none of...

April 29, 2025

Domino’s Pizza finally launches stuffed crust to keep...

March 5, 2025

Macy’s turnaround hinges on revamping some stores and...

March 7, 2025

Walmart says it’s ‘not going to be completely...

February 21, 2025

Hermès to hike U.S. prices for iconic bags...

April 19, 2025

    Become a VIP member by signing up for our newsletter. Enjoy exclusive content, early access to sales, and special offers just for you! As a VIP, you'll receive personalized updates, loyalty rewards, and invitations to private events. Elevate your experience and join our exclusive community today!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Editors’ Picks

    • 1

      Forum Energy Metals and Global Uranium Announce Exploration Update on Drill Targeting, Northwest Athabasca Project, Saskatchewan

      January 31, 2025
    • 2

      Mega M&A: Rio Tinto-Glencore Merger Sparks Chatter

      January 28, 2025
    • 3

      Excellent 90% recoveries at Cork Tree Well & Board Update

      February 17, 2025
    • 4

      Financial Agreement signed releasing $2M grant

      January 23, 2025
    • 5

      Netflix shares soar as company reports surging revenue, tops 300 million subscribers

      January 23, 2025
    • 6

      Cyclopharm Signs US Agreement with HCA Healthcare for Technegas®

      January 23, 2025
    • 7

      FDA officially authorizes Zyn nicotine pouches for sale following health review

      January 23, 2025
    • About us
    • Contacts
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: daytradingreports.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2025 daytradingreports.com | All Rights Reserved