What Southwest Airlines is altering, from bag costs to standard economic situation

Southwest Airlines introduced Tuesday what was as soon as unimaginable: It will certainly begin billing consumers to inspect their baggage.

It’s a $300 million wager. Last year, Southwest claimed its “rigorous research” discovered it would certainly shed that much in market share if it began billing bag costs. The plan has actually established Southwest in addition to its rivals for years.

Getting eliminate its popular “two bags fly free” technique becomes part of a substantial press at the service provider to ditch its enduring consumer rewards and plans. Southwest likewise introduced in 2015 that it’s relocating from open seating to a single-class cabin in order to increase income. Another modification introduced Tuesday: standard economic situation tickets that do not enable cost-free modifications.

Here’s what tourists require to understand about the brand-new plans:

Travelers that purchase any type of ticket other than Southwest’s high-level Business Select price will certainly need to pay costs to inspect bags. Customers that buy a Business Select ticket will certainly have the ability to inspect 2 bags free of cost.

Top- rate A-List Preferred constant leaflet program participants will certainly likewise obtain 2 inspected bags free of cost. A-List degree participants will certainly have the ability to inspect one bag free of cost, as will certainly those with a Southwest charge card.

Southwest really did not reveal just how much it will certainly set you back to inspect a bag, however costs begin at $35 each on rivals Delta, United and American.

The new checked baggage fees go into effect for tickets purchased on or after May 28.

Carry-on bag policies haven’t changed, even for basic economy tickets.

All tickets will include a free carry-on bag, even for the new basic economy tickets.

Southwest told employees on Tuesday, just after the announcement, that customers will “undoubtedly carry on more luggage than before” so it’s taking a few steps to try to keep things moving.

Gate agents will get mobile bag-tag printers “reducing the need for string bag tags” and the company will design new carry-on size guides so customers can see if their luggage fits as a carry on, according to a staff memo from Justin Jones, EVP of operations, and Adam Decaire, senior vice president of network planning, a copy of which was seen by .

The airline also plans to speed up retrofits of its Boeing 737-800s and Max aircraft to include larger overhead bins.

Possibly. In airport lobbies, Southwest said it could redistribute staff to handle changing customer needs with the new bag rules. It will also equip staff there with mobile printers.

“With an additional step for Customers to pay for bags at the ticket counter or kiosks, we have to plan for longer transaction and queue times, even if fewer Customers are checking their bags altogether,” the executives wrote.

Southwest has been under increasing pressure to raise revenue and improve returns after activist hedge fund Elliott Investment Management took a stake in the airline last year and pushed for changes to the carrier’s business model.

Southwest executives have long told Wall Street investors and customers that its “two bags fly free” policy is sacrosanct, something that sets it apart from competitors.

At an investor day in September, the carrier said it would make up to about $1.5 billion if it charged for bags but lose $1.8 billion in market share from the policy change.

Lots! Southwest is going to launch a basic economy fare that is not refundable and doesn’t allow for changes. It won’t allow for same-day standby tickets.

Flight credits for those “basic” tickets, if unused, will expire in six months while credits for other flights will expire in 12 months. Previously, Southwest credits didn’t expire.

The carrier last year said it plans to start selling tickets with assigned seats, ending its decades-old open-seating policy. It will also soon offer seats with extra legroom, a bid to compete with more full-service airlines.

Southwest Airlines CEO Bob Jordan said Tuesday that the carrier’s executive team thinks the policy changes will drive sign-ups for its co-branded credit card.

He said the new channels the airline is selling tickets through, like Expedia, will help the carrier.

Southwest passengers will earn Rapid Rewards frequent flyer miles based on how much they pay for their ticket. Redemption rates will depend on demand for the flight, a similar model to what other carriers have.