Southwest Airlines’ signature tagline “Bags Fly Free” seems to be a thing of the past.
Since its inception nearly 60 years ago, the airline has offered customers two complimentary checked bags as part of its pitch to distinguish it from competitors. But by this summer, it seems, Southwest will have to replace its oft-repeated slogan with a new one: “bags fly for an added fee.”
That’s because any customers who are not members of Southwest’s frequent fliers programs or traveling in an upgraded seat will have to pay for their checked bags, starting with flights booked after May 28, according to a company press release. The airline did not provide specific rates for the new fees. Southwest also announced that flight credits will now expire after one year, walking back a policy put in place during the pandemic that allowed customers to keep their credits indefinitely.
So far, the reaction to the new bag fees has been overwhelmingly negative. But, when observed alongside all of the other changes that Southwest has made to its programming over the past several months, it’s not exactly surprising. As of last month, shares of Southwest’s stock (NYSE: LUV) were down nearly 50% compared to five years ago. In an effort to appease its investors, Southwest has been on a mission to aggressively cut costs and implement a slew of added fees.
Those cost-saving policy changes appear to jettison all of the elements that once made Southwest’s brand identity distinct.
Turbulence for Southwest’s leadership
From its inception in 1966, Southwest has cultivated a reputation as a quirky, lower-cost carrier with unique perks and an equitable approach to seating that endeared it to a base of loyal fans. However, those perks have been first on the company’s chopping block as it’s reduced costs and implemented more Spirit-esque fees to drive sales.
Over the past several months, Southwest has been rolling out an overhaul intended to catch up with competitors like Delta and United by reviving its shrinking profits and the downward trajectory of its stock. The breakneck pace of this overhaul has been egged on by hedge fund Elliott Investment Management, which owns a $1.9 billion minority stake in the company and has frequently publicly criticized Southwest for not adapting to the times and cutting costs.
Southwest kicked off 2024 by debuting an interior cabin redesign, which is set hit runways this year. While the company argued that the revamped look was made with comfort in mind, customers pointed out that the seating looked like a major downgrade—mainly because, based on renderings provided by the company, the seats looked almost comically thin and rigid. TikTok users dubbed them “lawn chairs” and “Ozempic seats.” But, as it turns out, the lackluster seating was only a harbinger of the airline’s larger plans to come.
A once-quirky airline joins a sea of corporate sameness
Southwest has spent the last few months nixing its most distinctive offerings. In September, the company announced that it would slash its open seating policy, one of its characteristic brand traits, which allowed every Southwest passenger to choose their own seat when boarding. At the same time, the company revealed that it would swap a third of its seats for more “premium” chairs, which come with more legroom, faster Wi-Fi, and larger overhead bins—for an added cost, of course.
This new seating policy on its own was enough to cause Fast Company to ask whether Southwest was losing its “Southwest-ness” by sacrificing its unfussy reputation for greater profits. Even during the September investor call announcing the end of open seating, though, Southwest executives argued that ending the signature “Bags Fly Free” plan would be a “destructive” step too far, adding that they estimated charging bag fees would bring in about $1.5 billion per year but cost another $1.8 billion in lost business. The program was so central to Southwest’s identity that the company trademarked the “Bags Fly Free” slogan and has a whole backlog of ads, going back decades, that center on the promise (see this spot from 2009 and this one from 2023.)
Now, Southwest is scrapping the last vestige of its recognizable brand identity by backtracking on free bags. The backlash from fans has been swift. On X, one recent tweet with 4,000 likes and counting reads, “If Southwest Airlines had assembled a focus group and asked them ‘what’s the stupidest thing that we could do to ruin our company,’ this is what they would have come up with.” Another tweet with 11,000 likes adds, “Is Southwest aware that now people are no longer incentivized to fly with them??”
Popular opinion may have turned against the airline, but the market seems to approve. As of this writing, Southwest stock is up around 9%. The market also responded positively last month when the airline announced that it planned to lay off 15% of its corporate workforce in another cost-cutting measure.
As Southwest continues to whittle away the perks it once touted, it’s become just another set of wings in an industry full of likeminded competitors.
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