Southwest will start charging nearly all its passengers to check a bag and introduce some version of a stingy basic economy fare, the airline announced in a Tuesday morning news release – a shocking reversal for an airline that has prided itself for decades on not nickel and diming customers.
Those changes will take effect for new fares purchased May 28 and onward. Only travelers who buy the priciest Business Select® tickets or have top-tier A-List Preferred status will continue to get two free checked bags, while travelers with A-List status or a co-branded Southwest credit card will get one free checked bag. Critically, anyone who purchases a Southwest ticket by May 27 will still get two free checked bags.
The airline didn’t say how much it will charge passengers for luggage going forward (the industry standard is now $35 each way) – And Southwest’s famous “Wanna Get Away” fares will be a thing of the past: “Basic” tickets with even more restrictions will take their place.
Meanwhile, Southwest will also rework its entire Rapid Rewards program, shifting to a dynamic pricing model that could result in sky-high pricing when redeeming points. And less than three years after making it so that their travel credits never expire, Southwest credits will soon lapse in as few as six months after purchase.
The baggage policy and basic economy shifts are undoubtedly the biggest moves in the Dallas-based carrier’s 54-year history by far … and a major about-face. Just six months ago, Southwest executives promised its ultra-popular “Bags Fly Free” policy would remain untouched while promising for nearly a decade that they would never introduce a basic economy fare.
But times are changing for Southwest. Even after introducing its fares on Google Flights and other platforms and announcing it would finally end its divisive open-seating model, these are easily its biggest – and most painful – moves yet.
Why is Southwest Doing This?
Once beloved by both Wall Street and everyday travelers alike for posting consecutive profits even with customer-friendly policies, the airline has been struggling financially in the post-pandemic travel boom.
It’s been under immense pressure from an activist investor, Elliott Management Group, to make changes that will make them more money … by doing what its competitors have been doing for years. So in just the last year, Southwest has radically transformed itself.
It began last spring, when Southwest fares began appearing on Google Flights and later, Kayak and Expedia – a monumental change for an airline that always forced travelers to use its site or app to buy tickets. And just last fall, Southwest announced it would finally begin assigning seats, ending its divisive open-seating policy in order to start charging for seat assignments while installing some extra legroom seats on its fleet of Boeing 737s.
Back when the airline outlined those moves, we concluded: “Southwest Airlines will be an entirely different carrier in the next year or two … but it will still be Southwest.”
With its hallmark free baggage policy going out the door in the months to come, that’ll no longer be true. After holding out for decades, Southwest just joined the rest of the U.S. airline industry in the race to the bottom.
Yet the airline spun this transformation as a win for travelers, saying in a statement they would “drive revenue growth and reward its most loyal customers.”
“It’s about securing our future. We’re announcing changes to our business that will help us return to the levels of profitability we all expect,” Southwest CEO Bob Jordan said in a pre-recorded video Tuesday. “Our DNA isn’t open seating or even ‘Bags Fly Free.’ It’s a dedication to service and hospitality and to the Golden Rule for each other and for our customers.”
Southwest isn’t raking in the dough like Delta or United, but it still turned a $465 million profit in 2024.
Bye Bye, Free Bags
Other airlines unbundled fares almost two decades ago, adding additional fees for bags starting way back 2008. Yet Southwest stood alone in letting each and every traveler bring not one but two checked bags – no matter how cheap their ticket.
“This makes us unique. It places us in a category of one,” Ryan Green, Southwest’s (soon-to-be-former) executive vice president of commercial transformation, told investors last fall. The airline cited research showing that charging for bags would lose the airline money, suggesting that many flyers seek out Southwest specifically for free baggage.
Now, “Bags Fly Free” is no more.
Starting for tickets purchased May 28, most travelers will be forced to pay for even their first checked bag. Still want free luggage?
- Travelers who book the priciest Business Select fares will get two free checked bags
- Same goes for flyers with the airline’s top-tier A-List Preferred status
- Got one of Southwest’s co-branded Chase credit cards? Whether you’ve got the entry-level *southwest plus* or the top-of-the-line *southwest priority*, you can get your first checked bag free
- With Southwest A-List status, you’ll get one free checked bag, too
Southwest hasn’t yet said what it will charge for luggage – in response to a request for comment, an airline spokesperson said those costs “will be detailed soon.” After the entire U.S. airline industry raised the cost of a checked bag to $35 last year, we’d be shocked if Southwest didn’t do the same.
U.S. airlines made $7 billion in bag fees alone in 2023, but Southwest has barely collected a dime. Adding fees for baggage has been a core part of Elliott Management’s message to turn around the airline.
Some of Southwest’s foes think the airline is giving up a competitive advantage with this move.
“Clearly, there are some customers who chose them because of (their free luggage policy) and now those customers are up for grabs. We’ll see how that plays out,” Glen Hauenstein, Delta’s president, told investors during a Tuesday morning conference.
But in a presentation to investors on Tuesday, Jordan said there’s another upside for Southwest: Axing free baggage for all “will drive new enrollments in our co-brand credit card program” as a complimentary checked bag becomes a key benefit of its portfolio of Chase cards. Jordan also said that will save the airline some money flying planes – without that generous baggage allowance, they’ll have fewer bags to carry below the cabin on each flight.
Basic Economy is Coming, Too
The days of Southwest’s famous “Wanna Get Away” fares are officially numbered. “Basic” tickets will take their place instead.
The specifics of Southwest’s new, cheapest fares are still up in the air. But they’ll be far, far more painful than the Wanna Get Away tickets many frequent Southwest flyers have been gladly purchasing for years.
Much like the changes for baggage, these new fares will only take effect for tickets purchased May 28 and onward. Any Southwest flights you book beforehand – including for travel as far out as January 2026 – will fall under the current rules.
- A checked bag will cost you extra
- You’ll earn just 2x Rapid Rewards points per dollar
- Flights can’t be changed, period
- While you will be able to cancel a Basic fare without paying fees, those flight credits will last just six months from the date of purchase
This, too, is a major reversal. In 2019, former CEO Gary Kelley famously said: “You’re not going to see basic economy from Southwest. That’s not what we do … They unbundle, and we don’t.”
Last fall, we wondered aloud whether Southwest would break that promise. Turns out we weren’t wrong – we were just early.
Travel Credits Will Expire Again & More Rapid Rewards Changes Coming
While losing free checked bags and introducing basic economy fares are no doubt the most drastic moves, several more changes are on the way for Southwest flyers, including:
- A week after slashing how many points you’ll earn on flights, the airline announced it will introduce dynamic award pricing for Rapid Rewards Points, explaining that there will be “variable redemption rates across higher-demand and lower-demand flights.”
- For the last few years, Southwest flight credits have never expired … but no more: Travel credits with the airline will now last just one year from the date of purchase – or just six months for travelers who buy its new basic tickets.
This is a developing news story, check back for details
