Southwest Airlines ends free bag policy: How change could affect the carrier

Southwest Airlines Could lose part of leisure travelers to its competitors with its last decision to start invoicing tile bags, according to an industry expert.

It was a policy – as well as open seats – which helped the carrier differentiate from its competitors for more than 50 years and attracted a wide range of Budget travelers. Southwest announced this week that it would only offer free checkered bags to certain loyal customers and business class from May 28.

“Although the idea of ​​adding bag fees can work well on a spreadsheet, the Southwest may lose its share on the leisure travel market,” Fox Business Peter McNally, global manager of sectoral analysts at Third Bridge, told Fox Business Peter.

Airlines see the lower demand for customers, reduce financial expectations

The change occurred several months after the company warned that it would begin to offer assigned seats and to offer premium seats options on all flights, another decision designed to increase benefits by invoicing higher prices for premium seats on its entire network.

The two movements emphasize how the financial challenges of the company forced him to reassess his approach. Southwest has also been among several major American airlines this week that have remunerated their quarterly financial expectations, because the industry supports the softer demand for economic uncertainty and other factors.

A Southwest Airlines Boeing 737 Max 8 plane is seen parked at a door at Baltimore-Washington International Airport in Baltimore, Maryland. (Biting Angus / Bloomberg via Getty Images / Getty Images)

With its latest change, Southwest could lose because of the competition for longer flights but not all of its activities.

Southwest has many short-off flights which are aimed at travelers who usually make a day or a night trip and who do not need verified luggage. For these types of quick trips, the Southwest will continue to offer some of the most competitive prices on the market.

“The family of four people who were flying for Orlando on the Southwest now has more competitive options, like American, when you add bag costs,” said McNally.

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The bag policy change comes after society warned that it would begin to offer assigned seats and premium seats options on all flights. (Biting Angus / Bloomberg via Getty Images / Getty Images)

For example, the “big” airlines – Delta, American and United – “have powerful loyalty programs that make them more competitive on the American leisure market while offering premium options,” said McNally.

Southwest also said this week that he planned to introduce a new basic price for his cheapest tickets bought on May 28 or after or after or after the start of the higher -end seats with an additional leg space for higher fees.

“While our experts see the opportunity for income from more premium options (for example, an additional leg space), these opportunities will take time to play because the cabins must be reconfigured,” said McNally, but “this is not the instant reinforcement of income by saying:” We are now invoicing these bags. “”

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However, McNally said that the price of the basic economy will be quite standard because the airline could not reduce prices as much.

“The low cost end of the air transport industry has found the lower limit on prices. The mind has gone bankrupt, after all. The costs increased during the pandemic due to labor rates and stayed there,” he said, adding that they are contractual and do not change.

Fuel costs have decreased in recent years, offering a certain relief, but the possibility of offering extremely low prices is always limited. Said McNally.