Southwests major change to free bag policy raises eyebrows among rivals: Really big deal

Executives from United Airlines and Delta Air Lines on Tuesday weighed in on rival Southwest Airlines making a major change to its checked bag policy.Southwest announced it will end its long-standing policy of free checked bags beginning in May.Some customers, including Southwest Rapid Rewards A-List Preferred Members and Business Select passengers, will retain the option to check two bags for free with Southwest when the new policy goes into effect, the carrier said. Southwest will also offer one free checked bag to A-List Members and “other select Customers” and credit one bag for Rapid Rewards Credit Card Members at that time.The move — a significant change from all Southwest travelers being allowed two free checked bags — was announced by the airline on Tuesday, the same day as the JPMorgan Industrials Conference. At the conference, United Airlines CEO Scott Kirby fielded a question about the impact of Southwest ditching its free checked bag policy, saying he thought it “will be a really big deal” for the Dallas-based carrier. “It would be good for everyone else.

We’ll make them more competitive,” he continued.“But it mostly impacted the low-end customers.” “Our customers that have the credit card and [the frequent flyer program] get free bag fees, because it’s a reason we never worried about matching it.

But I think it will raise the tide for Southwest across the board.The relative margins will be worse in competitive markets because it will cause some customers at the margins to switch to competing airlines,” Kirby said. Kirby added that he thought the “far bigger thing” was “it’s the slaying of a sacred cow.” “I view it as a big deal because it feels more financially driven — a results-driven airline than it’s ever been before,” Kirby said. Delta President Glen Hauenstein also offered his thoughts on Southwest’s decision during Delta’s presentation at the conference.“I think clearly there are ...