Southwest Airlines changes

[Scarlett]

Seems like some pretty major changes at WN over in the States. The change from open to allocated seating has me shrugging my shoulders why it was even a thing anyway. I guess they’ll start charging for seating now.

The biggie though is that their key discriminator, two free bags, is being removed.

Seems a bizarre move as they become just another LCC. But I guess the bean counters have worked out that they’ll make x% extra revenue.

https://edition.cnn.com/2025/03/11/business/southwest-airlines-checked-baggage/index.html?iid=cnn_buildContentRecirc_end_recirc

 

[Blackadder]

This is what happens when private equity companies get involved.

 

[eastwest101]

Seems like some pretty major changes at WN over in the States. The change from open to allocated seating has me shrugging my shoulders why it was even a thing anyway. I guess they’ll start charging for seating now.

The biggie though is that their key discriminator, two free bags, is being removed.

Seems a bizarre move as they become just another LCC. But I guess the bean counters have worked out that they’ll make x% extra revenue.

https://edition.cnn.com/2025/03/11/business/southwest-airlines-checked-baggage/index.html?iid=cnn_buildContentRecirc_end_recirc

Its such a predictable path: Bean counters -> lowest common denominator -> no compelling consumer selling point -> failure of business

 

[trooper]

Presumably the new bag charges will mirror those of the legacys? Thats likely to be the end of WN for me. If I have to pay for bags with them I may as well get the FF points from UA or AA. Especially since WN's fares have NOT been all that great for some time. Are there enough people like me to impact WN's profitability? I suppose time will tell.

 

[Blackadder]

Another reason I don't understand this move by WN , they have no Business class as such so no reason for Business travelers to fly them , further impacted by no direct east/west routes.
They are very much a leisure flyer airline , and doing all they can to deter the leisure market from flying with them.

 

[Mattg]

The two free checked bags was their main selling point!

They do still have a solid network, including quite a lot of point-to-point routes that aren't served by other airlines (e.g. out of places like Kansas City). But other than that, unless they're way cheaper, I'm struggling to think of a reason why you would choose them going forward...

 

[dajop]

Analysts just didn’t like it. And haven’t for a long time. They were too far apart from the Big 3.

 

[kangarooflyer88]

I think as others have pointed out out any unique selling proposition to Southwest has now disappeared. Their main selling points was their open seating which allowed couples and groups to sit together (something assigned seating cannot do). It was also shown that this seating approach resulted in quicker boarding which translated into better on time performance. And then we get to the whole two free checked bags bit. That was a huge selling point for the airline and another reason why Southwest could largely have a great on time performance record. After all if you can check bags for free, why bother with carry on? Certainly speeds up boarding.

But now these changes eliminate those unique selling propositions and puts Southwest in a worse position than the U.S. big three of United, Delta, American. Say what you will about the big three but they have a route network, none of this point to point nonsense that can leave you stranded. They also have lounges, priority security and free checked bags provided you hold elite status. So now as a Qantas Gold travelling domestically in the U.S. I have the option of a Southwest fare which at best might be comparable to the fare on American, but the. I have to pay extra for everything. Meanwhile I can book a dirt cheap American fare and still get my free checked bags and lounge access. The choice is a real no-brainer if you ask me!

 

[jase05]

Shows how much I pay attention as I always had the impression they were a LCC hence never even considered them when I was looking at flights

 

[L2.]

This policy change is a sharp u-turn from their view on this matter at their 2024 Investor Day Presentation...


I guess that one point of differentiation that still remains is that in a few of the biggest metropolitan areas they primarily operate from secondary airports, e.g. Houston Hobby, Dallas Love Field, Chicago Midway, Baltimore, Burbank/Long Beach/Ontario, etc, and they would likely have a significant customer base that would rather stick with them than switch to flying on other carriers out of say DFW, O'Hare or LAX.

Of course there may be also be a similar number of people who might have found say LAX to be more convenient, but only went out to Long Beach because of the value formerly offered by Southwest.

 

[Blackadder]

This policy change is a sharp u-turn from their view on this matter at their 2024 Investor Day Presentation...
View attachment 435907

I guess that one point of differentiation that still remains is that in a few of the biggest metropolitan areas they primarily operate from secondary airports, e.g. Houston Hobby, Dallas Love Field, Chicago Midway, Baltimore, Burbank/Long Beach/Ontario, etc, and they would likely have a significant customer base that would rather stick with them than switch to flying on other carriers out of say DFW, O'Hare or LAX.

Of course there may be also be a similar number of people who might have found say LAX to be more convenient, but only went out to Long Beach because of the value formerly offered by Southwest.

As someone who regularly flies out of SNA when in I'm in the US, often I would find myself going to ONT or LGB if a cheaper WN fare was available.
I guess those days may become fewer now.

 

[TomVexille]

This will seriously piss of their loyal customer base

 

[MELso]

It's a headscratcher for sure.

Unless WN happens to fly the city pairs you're flying between and they're the cheapest option to do so, I don't know why you'd bother now as they're just like any other airline, but without premium cabins, lounges or a broad network of partners, while the slower turnarounds will mean fares will inevitably have to rise.

 

[dajop]

This will seriously piss of their loyal customer base

But not investors. They get the short term sugar hit - it’s up 5% for the month whilst the other big airline (AA/DL/UA) is down 30% for the month. Then they’ll have to work out how to make it work to keep the stock rising.

 

[Scarlett]

Been thinking about the the why and there’s two things I can come up with.

1. the initial sugar hit to share prices which is likely tied to some sort of short term financial incentive for the private equity owners.

2. the longer term play may be that they see WN being the next merger target and have basically started that process already. Previously I’d have said that they would probably face large hurdles from regulators, but in the reign of the current US tsar a purchase (donation?) of Trump or Melania meme coins should clear any hurdles…