Southwest Airlines as we know it is over. Here’s what’s changing, from bag fees to basic economy

Southwest Airlines introduced Tuesday what was as soon as unthinkable: It should begin charging clients to verify their baggage.

It is a $300 million gamble. Final 12 months, Southwest stated its “rigorous analysis” discovered it would lose that a lot in market share if it began charging bag fees. The coverage has set Southwest aside from its opponents for many years.

Eliminating its well-known “two luggage fly free” technique is a part of a large push on the service to ditch its longstanding buyer perks and insurance policies. Southwest additionally introduced final 12 months that it’s shifting from open seating to a single-class cabin so as to elevate income. One other change introduced Tuesday: basic economy tickets that do not enable free modifications.

Here’s what vacationers want to know concerning the modifications:

Vacationers who purchase any ticket besides Southwest’s top-level Enterprise Choose fare can have to pay fees to verify luggage. Clients who buy a Enterprise Choose ticket will probably be in a position to verify two luggage free of charge.

Prime-tier A-Checklist Most well-liked frequent flyer program members can even get two checked luggage free of charge. A-Checklist stage members will probably be in a position to verify one bag free of charge, as will these with a Southwest bank card.

Southwest did not disclose how a lot it will value to verify a bag however fees begin at $35 apiece on opponents Delta, United and American.

The brand new checked baggage fees go into impact for tickets bought on or after Could 28.

Southwest has been below growing stress to elevate income and enhance returns after activist hedge fund Elliott Funding Administration took a stake within the airline final 12 months and pushed for modifications to the service’s enterprise mannequin.

Southwest executives have lengthy advised Wall Road buyers and clients that its “two luggage fly free” coverage is sacrosanct, one thing that units it aside from opponents.

At an investor day in September, the service stated it would make up to about $1.5 billion if it charged for baggage however lose $1.8 billion in market share from the coverage change.

Tons! Southwest is going to launch a basic economy fare that is not refundable and would not enable for modifications. It will not enable for same-day standby tickets.

Flight credit for these “basic” tickets, if unused, will expire in six months whereas credit for different flights will expire in 12 months. Beforehand, Southwest credit did not expire.

The service final 12 months stated it plans to begin promoting tickets with assigned seats, ending its many years of its open-seating coverage. It should additionally quickly supply seats with further legroom, a bid to compete with extra full-service airways.