Southwest Ends its Famous Two-Free-Bags Policy

Pack light or pay up: Southwest will no longer let customers fly with two free checked bags, a unique policy that set it apart from its peers. 

Starting in late May, Southwest said it’ll only grant two free checked bags to business-class flyers and anyone who has reached the upper tiers of its loyalty program. Southwest credit card holders and some lower-level loyalty club members will get one free checked bag. 

Everyone else will have to pay a fee to stow their five extra pairs of shoes in the cargo hold. 

Critics say the switcheroo could make Southwest lose its zest, or what sets it apart from other airlines. As recently as September, Southwest execs said the two-bag policy was so popular that, if the airline were to ditch it, it would lose more money from customers fleeing to rivals than it could recoup with bag fees. 

Last year, the airline announced plans to do away with another uniquely Southwest policy: its open, no-assigned-seats boarding policy.

Buckle Up, Turbulence Ahead

Southwest has been under pressure from activist investors to squeeze out more revenue per seat. And its first-ever large-scale layoffs last year weren’t enough to get it to cruising altitude. Southwest trimmed its quarterly guidance yesterday.

It’s not alone: Delta, American, and United all cut their forecasts this week alongside Southwest. Cabin pressure is rising for the wider industry as airline execs grow concerned that consumers are skipping vacations (especially stateside ones) and companies are telling employees to phone in business trips:

• Delta cited economic uncertainty as a top reason travel demand is cooling, as well as fears following a string of airplane safety incidents — like Delta’s recent nonfatal flipped-plane landing.
• United also noted it expects its government travel to fall by 50% after spending crackdowns and layoffs in the sector. 

At the same time, airlines expect revenue to remain strong from travelers opting for premium perks and heading to far-flung international destinations.

Booking “Basic Economy Plus Extra”: In response to shifting spend, airlines are adjusting their routes and creating new ways for flyers to splurge — like how Southwest plans to charge for extra legroom when it rolls out assigned seating. The risk: fee-fatigued customers book with cheaper rivals, or skip their next trip altogether.