Southwest Airlines will impose a baggage check fee on customers, ending a longstanding policy that executives mentioned last fall as a key differentiator for the budget airline from its competitors.
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For a long time, Southwest focused its advertising campaigns on its policy that allowed passengers to check two bags for free.
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However, on Tuesday, the airline announced that those who have not reached the advanced levels of their Rapid Rewards program, have not purchased a first-class ticket, or do not have the airline’s credit card, will have to pay a baggage fee.
The airline company did not specify the fare scheme, but mentioned that the recent regulations will apply to flights booked from May 28th onwards.
Why did Southwest Airlines change its charging policy?
According to the words of CEO Bob Jordan in a statement, “we have a tremendous opportunity to meet the current and future needs of customers, attract new customer segments that we do not compete for today, and return to the levels of profitability that both we and our shareholders expect.”
Less than a year ago, the Dallas-based airline announced that it was ending another of its traditions, the open boarding method it has used for over five decades. Southwest plans to begin flights with passengers in previously assigned seats next year.
Recently, Southwest has faced difficulties and is being pressured by activist investors to improve its profits and revenues. In October, the airline reached an agreement with the hedge fund Elliott Investment Management to avoid a showdown over control of the company. However, Elliott managed to secure several seats on the company’s board of directors.
Last month, the airline announced that it would cut 1,750 jobs, equivalent to 15% of its corporate staff, marking the first significant layoffs in its 53 years of existence.
The layoffs, which were planned to mostly end by late June, are part of a strategy to reduce expenses and make the company a “more efficient, faster, and more agile organization,” Jordan explained at that time.
On Tuesday, Southwest’s stocks experienced an increase of over 9%.