Southwest Airlines on Tuesday said it would start charging for checked bags, ending another longtime policy that had set it apart from other airlines as it seeks to boost revenues.
Customers with the highest loyalty status will be spared from the fee, but all others will have to pay for checked bags for flights booked starting on May 28. The announcement represented Southwest’s latest decision to drop a practice that had made it unique — and appealing — to customers.
The airline is also working to add premium seats, end its open-seating policy and recently started offering red-eye flights. When it announced those changes in September, the airline said that it would retain its beloved bag policy, which its own studies had found was a key differentiator for customers.
When Glen Hauenstein, the president of Delta Air Lines, was asked at an investor conference on Tuesday about whether the shift would benefit other carriers, he said: “Clearly, there are some customers who chose them for that and now those customers are up for grabs. We’ll see how that plays out.”
Southwest has faced intense investor pressure to make changes as it has struggled in recent years to contain costs and boost revenue. While other major airlines benefited from rising customer interest in premium and international travel, Southwest lacked the high-end offerings and routes to benefit from those trends.
The hedge fund Elliott Management saw an opportunity. Last summer, it said that it had amassed a 10 percent stake in Southwest and began pushing for change, many of which the airline would announce months later. Elliott had also pushed for the ouster of Southwest’s chief executive, Bob Jordan, but abandoned that effort after the airline agreed to shake up its board of directors.
Customers who hold the airline’s top loyalty status or buy its most expensive fares will still get two free checked bags, while some others will get one free checked bag. Remaining customers will have to pay an amount that the airline has not disclosed.
Some customers on social media and industry observers criticized the move.
“I think we’ll remember today as the day that Southwest died,” Brett Snyder, a former industry insider who writes about aviation at the Cranky Flier website, said in a post on Tuesday. “Its entire value proposition — everything that made it different — has disappeared faster than you can say ‘Elliott Investment Management.’”
Content Source: www.nytimes.com