Harshman Travel Agency shares Cruises and Southwest Airline Baggage Changes with Peter Mingils

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Southwest Airlines Ends "Bags Fly Free" Policy: Impact on Travel Costs

For over half a century, Southwest Airlines distinguished itself in the U.S. airline industry with its customer-friendly "two bags fly free" policy, a rarity among major carriers. However, as of May 28, 2025, Southwest has eliminated this perk, introducing baggage fees for most passengers. This seismic shift, driven by financial pressures and activist investor influence, aligns Southwest with competitors like Delta, United, and American Airlines, which have long charged for checked luggage. The change significantly impacts travel costs and could reshape consumer behavior and airline loyalty.

Starting May 28, 2025, Southwest customers booking Basic, Wanna Get Away Plus, or Anytime fares face a $35 fee for the first checked bag and $45 for the second. Exceptions exist: Rapid Rewards A-List Preferred members and Business Select fare passengers still receive two free checked bags, while A-List members and Rapid Rewards credit cardholders get one free checked bag. These fees mirror industry standards, with competitors charging $35-$40 for the first bag and $45-$50 for the second. However, for travelers accustomed to Southwest's no-fee policy, this change adds a new layer of expense to air travel.

The financial implications for passengers are notable. A round-trip flight for a family of four checking two bags each could now incur an additional $280 in baggage fees ($35 per first bag, $45 per second, per person, each way). This increase erases much of Southwest's cost advantage, particularly for budget-conscious travelers who relied on the airline's low fares and free baggage to keep trips affordable. Posts on X reflect widespread disappointment, with users lamenting the loss of a key reason for choosing Southwest over other carriers. One user called it "a bad move,” signaling potential erosion of customer loyalty.

Southwest's decision stems from a need to boost revenue after reporting a $149 million net loss in Q1 2025. The airline projects baggage fees could generate up to $1.5 billion annually, though it risks losing $1.8 billion in market share due to customer backlash. The move follows pressure from activist investor Elliott Investment Management, which acquired a $1.9 billion stake in Southwest and pushed for revenue-enhancing changes, including ending free baggage and open seating. While Southwest's stock rose 8% after the announcement, competitors like Delta and United anticipate gaining customers who valued Southwest's unique perks.

Travelers may now face higher overall costs, especially for longer trips requiring checked luggage. To mitigate fees, passengers might opt for carry-ons, prompting Southwest to install larger overhead bins and deploy mobile bag tag printers. However, this could lead to crowded cabins and slower boarding, potentially diminishing the airline's operational efficiency. Alternatives to avoid fees include enrolling in Southwest's loyalty programs or using their co-branded credit card (with annual fees starting at $69), but these options may not appeal to infrequent flyers.

The broader impact on the travel industry is significant. Southwest's alignment with competitors' fee structures reduces differentiation in a crowded market, potentially pushing cost-sensitive travelers to low-cost carriers like Frontier, which recently introduced a free bag offer to capitalize on Southwest's change. As airlines continue to unbundle services—charging separately for bags, seats, and other amenities—travelers must budget more carefully, comparing total costs rather than just base fares. Southwest's policy shift marks the end of an era, challenging passengers to adapt to a new reality where even the most customer-friendly airlines prioritize revenue over perks.

Sources:
The New York Times, May 27, 2025 CNBC, May 26, 2025 CBS News, May 28, 2025 , X posts, March 11, 2025

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