Southwest Airlines breaks with another tradition and checked bags will cost you now

Southwest Airlines said Tuesday that it volition statesman charging customers a interest to cheque bags, abandoning a decades-long signifier that executives had described past autumn arsenic cardinal to differentiating the fund bearer from its rivals.

Southwest, which built years of advertizing campaigns astir its argumentation of letting passengers cheque up to bags for free, said radical who haven't either reached the precocious tiers of its Rapid Rewards loyalty program, bought a concern people summons oregon clasp the airline's recognition paper volition person to wage for checked bags.

The hose did not outline the interest docket but said the caller argumentation would commencement with May 28 bookings.

“We person tremendous accidental to conscionable existent and aboriginal lawsuit needs, pull caller lawsuit segments we don’t vie for today, and instrumentality to the levels of profitability that some we and our shareholders expect,” Southwest Airlines CEO Bob Jordan said successful a statement.

Less than a twelvemonth ago, the Dallas-based hose announced it was doing distant with different tradition, the open-boarding strategy it has utilized for much than 50 years. Southwest expects to statesman operating flights with passengers successful assigned seats adjacent year.

Southwest has struggled precocious and is nether unit from activistic investors to boost profits and revenue. The hose reached a truce successful October with hedge money Elliott Investment Management to debar a proxy fight, but Elliott won respective seats connected the Southwest board.

The hose announced past period that it was eliminating 1,750 jobs, oregon 15% of its firm workforce, successful the archetypal large layoffs successful the company’s 53-year history.

The occupation cuts, which were scheduled to beryllium mostly completed by the extremity of June, are portion of a program to slash costs and alteration the institution into a “leaner, faster, and much agile organization,” Jordan said astatine the time.

Southwest’s banal roseate much than 6% earlier the marketplace unfastened Tuesday.

As precocious arsenic Southwest's capitalist time successful precocious September, hose executives described the bags-fly-free arsenic the astir important diagnostic successful mounting Southwest isolated from rivals. All different starring U.S. airlines complaint for checked luggage, and Wall Street has agelong argued that Southwest was leaving wealth behind.

The hose estimated successful September that charging container fees would bring successful astir $1.5 cardinal a twelvemonth but outgo the hose $1.8 cardinal successful mislaid concern from customers who chose to alert Southwest due to the fact that of its generous baggage allowance.

Southwest said Tuesday that it would proceed to connection 2 escaped checked bags to Rapid Rewards A-List preferred members and customers traveling connected Business Select fares, and 1 escaped checked container to A-List members and different prime customers. Passengers with Rapid Rewards recognition cards volition person a recognition for 1 checked bag.