Southwest To Charge For Luggage As Airlines Cut Guidance

U.S. airlines are grappling with signs of weakening demand, but Southwest Airlines is taking a bold step to boost revenue—ending its 54-year-old Bags Fly Free policy.

The Dallas-based airline has lowered its first-quarter revenue outlook. I Photo: Southwest Airlines Facebook

The move is expected to disappoint customers, but investors welcomed the decision, pushing Southwest stock higher on Tuesday. Barron’s Daily reporters Callum Keown and George Glover covered the announcement..

The Dallas-based airline has lowered its first-quarter revenue outlook, citing slowing demand amid a weakening macroeconomic environment.

However, it also unveiled changes aimed at boosting revenue, most notably the end of its free checked bag policy. Starting with flights booked on or after May 28, Southwest will begin charging customers for their first and second checked bags.

Reward program members will still be able to check luggage for free. While travelers may be frustrated by the change, investors reacted positively. Southwest’s stock surged 8.4%, defying a broader decline in the airline sector.