Wednesday, May 28 was a big day in the history of Southwest Airlines. It’s the day the airline took a big step toward… being like everybody else. We knew this was coming, of course, but what we didn’t know was exactly how pricing of all these changes would look. Now we know.
The two big changes were the introduction of first and second bag fees along with a Basic Economy fare. Assigned seating comes later this year, so consider this a partial implementation of the full plan. Before getting into the weeds on this, I just briefly want to touch on the IT situation. Here is a live look at people checking bags at Southwest on the first day of implementation.
Of course, I’m kidding. This is quite obviously an AI-generated image, purposefully made so bad that it can’t be believable to anyone. I heard of no glitches. So let’s all pat Southwest’s much-maligned IT team on the back for getting this done on a very tight timeline.
Two Checked Bags, No Longer Included
In 2024, Southwest transported just shy of 132 million bags. That was the most of any airline by far. (Second place was American with 20 million fewer.) The vast majority of those bags were checked without any additional fee above and beyond the fare paid, but that changes now. Starting this week, Southwest has matched everyone else with a $35 fee for the first checked bag and a $45 fee for the second.
If nobody ever paid for a bag before, that would mean, what, an extra $5 billion or so a year in revenue? But of course, it’s not that simple.
First of all, people did pay for bags before. It probably wasn’t a huge number, but those who checked more than two bags had to pay. More importantly, however, not all of these first and second checked bags will pay in the future anyway.
Southwest won’t charge its top-level elites — A-List Preferred — anything for two checked bags. And its lower level A-List members get one checked bag free and a $10 discount on the second. Further, anyone holding a Southwest credit card will get a first checked bag included. Oh, and buying the top level Business Select fare — soon to be called Choice Extra when the new seating plan rolls out later this year — gets you two bags included.
We don’t know how many of those 130+ million bags were checked by people who won’t pay going forward, but we also know that even those who do have to pay extra to check a bag may have second thoughts. After all, that is what Southwest has argued for years, even as recently as last September’s investor day. It said that the revenue generated would be not offset the loss in share. Then it made an abrupt about-face.
What is clear is that Southwest checks more bags per passenger than other airline for two reasons. One, people who have checked bags will select Southwest because it ends up saving the money. And two, people don’t care about schlepping carry-ons as much when they don’t have to pay extra to check a bag. I would expect both of those trends to reverse.
Long story short, this won’t get anywhere near $5 billion in annual revenue, but we won’t really know for a long time what the actual value is, because this policy is based on when people bought their tickets. A lot of travel has been sold for this summer already, so we won’t know for a little while how much will be generated.
The Most Basic of Economies
And then there’s Basic Economy. Since this is all about pricing, we couldn’t really know what the upsells would look like until now. But now that it’s out in the open, we can analyze this more closely.
As expected at the start, this is purely stripping of benefits from existing fares. The old Wanna Get Away fare is now Basic, meaning no changes, lower mileage earning, and a credit that is only valid for six months from the date of issue. When assigned seats roll out, those will not be included in this fare either.
The idea here is to have a fare that better matches the lowest level at all the other airlines… and then hope that most people buy up to a higher level.
As of now, the higher level remains Wanna Get Away plus. That becomes just Choice when the new seating plan rolls out. But Southwest is hoping that the promise of a credit valid for 12 months, the ability to change, and the dream of a seat assignment in the back will be enough to woo people to pay more.
Just how much more? This we can see, though this will absolutely change over time.
I booked my last Wanna Get Away flight the day before the change went into effect, so I knew what pricing looked like. When the switch flipped, the old Wanna Get Away fare just became Basic. As for the buy-up, if I wanted it, it would be an extra $30 each way on these short-haul flights. It looks like longer-haul flights are $40 more.
Don’t expect it to stay this way. I imagine we are going to see significant fluctuation as they can test where people are willing to pay more and where they aren’t.
Even today, there are some strange exceptions around this plan, including when Basic is even made available. For example, looking at Southern California to Nashville, it’s all over the map.
At LAX, the bottom 10 fare buckets have Basic fares while those higher than that do not, so you get something like this on the website:
In Long Beach, however, it’s the bottom 9 fare buckets. And Ontario, Orange County, and San Diego don’t have Basic available at all. Why? It’s because in those markets, Southwest is only filing Basic fares that are valid with a minimum 30-day advance purchase.
Looking out toward December, the script flips. LAX has nothing inside of 30 days while Long Beach and Ontario have no Basic at all. But even where Basic does exist, it isn’t consistent. For example, look at LAX in December and Wanna Get Away plus is only $11 more than Basic.
Why? Because there are no Basic fares made available on the lowest fare buckets. In fact, it’s only available in December when booked in C class (which is not business as some might expect, just another coach bucket).
Whether this is some kind of elaborate test or if it’s just a mess from the previous fare structure that needs to be cleaned up, I have no idea. But Southwest’s goal here is undoubtedly to get as many people to buy up to a higher fare brand than they would have done previously. Basic doesn’t make money by being sold. It makes money by getting people to hate it so much that they’ll pay more for something else.
And so the grand Southwest experiment continues.
41 comments on “Southwest’s Push for Ancillaries and Upsells Has Officially Begun”
More ancillaries and flights to the lesser Antilles!
I’m inclined to say this likely wont change demand in the long run, but I really dont ever check bags and even on message boards i see that have nothing to do with flying, I see people saying they won’t use WN again so, who knows
I heard the same thing when WN suffered it’s Christmas meltdown coming out of Covid. The result is the airline gave out some vouchers and people kept flying them. The public complains regularly about econony air tavel, but buys the lowest price tickets.
Exactly. The media covers airline meltdowns and non-fatal safety incidents a ton to get eyeballs for their advertisers, people swear up and down that they will never fly X airline again, and then something else takes over the media cycle. When those same pax need to book a flight another month or two later, they have either forgotten about the issues or simply don’t care enough to take a more expensive or less convenient flight.
The one major (possible) exception to this that I can think of is an airline with major safety issues or multiple fatal accidents in a relatively short time period, such as ValuJet, but thankfully we haven’t seen that situation occur in the US commercial airline industry for many years.
Wendover Productions strikes again & this one is on point. https://youtu.be/BD-rLIz9XUo?si=GqYhrmVgn8cHe3Jv
They screwed me on that melt down in 2022. I was A-list with WN at the time. I flew my remaining credits and never looked back. Some people do vote with their feet.
Yep, they are my “break glass in emergency” backup option so I don’t fly them much, maybe a couple of flights out of every hundred, but no more. Before the renewal, my WN credit card will be cancelled, they’ll likely expire my standing $66 credit eventually and can keep my few miles that are in the bank, I’m also a “never again” WN flyer. The experience was bad before but now it is worse than the other four big carriers, so guess who is at least #5 on the list of possibilities and never going to get booked. Nice job, Elliott!
I can’t remember the last time I checked bags, even on trips to Europe, so I don’t really care much about that change. But there are other changes that compel me to move as much of my business as possible to other airlines; the biggest contributors being the change to the policy of same-day confirmed changes for Basic fares (as an A-list member for at least the past 10 years or so) paired with the reduction in the time to use basic fare credits to 6 months.
I’m not mad about the change, but if Southwest is just going to be like every other airline, I will prioritize AS and AA (after burning off all of my flight credits, of course). At least those airlines give me a chance at first-class upgrades and offer point programs that offer international options. I doubt I’ll get to A-List (20 one-way flights per year) going forward. So be it.
I’m guessing Southwest won’t miss me much, I’m probably not a particularly profitable passenger. But I wouldn’t be surprised if there are a number of people like me. My prediction: the impact of the changes on Southwest’s financial results won’t truly be visible until 2026. And that impact won’t be a net positive.
Do elite status or credit cards give any of specific benefits with basic fares? Seat assignments, for instance?
I believe that A-List will still provide same-day standby on basic fares, just not same-day confirmed changes. At least that’s what Southwest told me when I e-mailed my displeasure about the changes.
“For reservations booked and ticketed and/or changed on or after May 28, 2025, free same-day change is only available for Business Select®, Anytime, or Wanna Get Away Plus® fares. Basic fares, and Rapid Rewards® A-List Preferred and A-list Members will no longer be eligible for free same-day change unless the Member purchases a qualifying fare.”
As for seating, I don’t really know the answer officially yet, but we’ll find out in a couple months.
I’m curious to see the impact to the operation i.e. boarding time & turn time. The hypothesis would be that more people bring carry-ons now, which slows down the boarding process. WN already runs a tight turn, so is network/scheduling building in a little bit of buffer?
I am sure there will be reports coming out of how well (or badly) the transition is going w/ bag checks at the counter and at the gate.
WN is not adding more overhead bin space and it is certain that some of the same bin-stuffing that goes on at other airlines – and delays boarding and deplaning – will come to WN but with worse results.
I expect that WN’s solution will be a whole lot more gate checking of bags from gates that are not as well equipped to handle gate check gates as other airlines that have bag slides and other devices.
ultimately, WN is just closing the gap that allowed it to carry free bags for passengers that no other airline would allow to fly for free. There is and will be alot of backlash but ultimately people will have to shop for airlines based on a fairly standard set of industry criteria and WN will compete fairly well just based on the size of its network.
WN employees will be royally tested during this phase of rollout but they have proven they can deliver their service as good or better than the rest of the industry. It would seem that a date other than the beginning of summer would have been easier on everyone for the bag fee rollouts.
Moving to assigned seats and getting extra seat revenue will be tame in comparison.
Regarding the timing, now isn’t idea, but it could be worse. I’m not sure that there’s ever a great time to do these things (perhaps the post-summer travel lull for domestic VFR traffic between Labor Day and Thanksgiving?), but Southwest was pressured to implement the changes fairly quickly, so here we are.
In terms of Q1/Q2 timing of the changes and focusing on traditional VFR travel, at least Southwest waited until after winter/spring breaks, after Memorial Day weekend, and after most college graduations. Sure, summer travel is starting, but this gives Southwest about five weeks until travel starts for the next major holiday (July 4th). Without knowing the week to week changes in demand for trips on Southwest, I’m not sure that one can argue that another time in Q2 or early Q3 would have been better.
US$5 billion is unlikely to be added to revenues…. but I could certainly see at least US$1 billion added. WN is a major carrier and has pricing power…. finally they are learning they can use it instead of just being neurotic worriers.
$1 billion U.S. would make it the second-highest grosser in terms of bag fees in the U.S. behind American $1.2 billion and ahead of United’s $930 million. That’s a pretty high estimate.
They do carry the most paxs domestically of the big 4.
Ryanair in Europe generated almost US$5 billion in ancillaries (bags, seats, food, etc) in the year ending 31-March-2024 or about US$26 per passenger. Southwest, with a modest amount of effort, should certainly be able to hit US$2 billion per year in ancillaries (equivalent to US$14 per passenger).
The continued evolution of WN into an adult airline (i.e., the elimination of festival seating), for better or worse. As Tim Dunn points out, “…ultimately people will have to shop for airlines based on a fairly standard set of industry criteria and WN will compete fairly well just based on the size of its network.”
On the main page, I saw the AI image (with its telltale blurring, etc.) and thought, “oh, geez, Cranky” (like some other popular aviation blogger…) “is now using obviously fake AI images, too.” Then I read the post and got a chuckle. Thanks for that.
For a second or two I thought it was real, and wondered where in Hell’s armpit is that?! Needed that giggle this morning.
CF – It would be interesting to see a full year comparison (2026) vs. 2024 in terms of how this affects their demand, and overall revenue. Obviously, like you stated, this year would be hard to pull any meaningful data from, given the timing of the implementation. Post idea for early 2027!
You need to normalize it based on how the economy is doing too. Would be best to compare WNs margins and revenues to its completion comparing 2024 to 2026 performance (you would need to account for the summer Delta meltdown).
As far as I’m concerned, Southwest still has one major advantage – a robust schedule from Long Beach. I wonder how long this will last.
I wonder if they will cut back on their slots at LGB. Let someone else come in….. If they dare too. ?
Not a chance. They played LGB perfectly.
I don’t see LGB getting particularly affected compared to other Southland airports.
And if they did, between their experience and JetBlue’s history there I don’t see anyone really wanting to go into LGB in a big way, except maybe Breeze if enough slots opened up for a base. Otherwise I could see other airlines picking up a slot or two as spokes, perhaps Alaska since they’re there as Hawaiian anyway.
I haven’t flown WN in years, but isn’t their gate check bag process a little clunky due to gate setup and union work rules? I wonder if anyone has thought that through in Dallas, as the onslaught of gate checks is a-comin’…. Something the other airlines have not entirely addressed but refined over the years (like computers at the ends of jetways ala Delta, etc). I can see D-0 plummeting as summer penny pinching leisure travelers load up the bins with carryons. I feel for their agents and FA’s.
There’s another variable coming with the assigned seating, and that’s the 737-700, which won’t be retrofitted.
Being a Burbank based flyer, that’s all we have until maybe the new terminal opens, but who knows what they’ll do after it does in late 2026. If you’re educated on the seating changes, and you’re on an all -700 itinerary, there will be no need to purchase the higher fare class with the guarantee of extra legroom. We’re A-List with the Priority CC and a Companion, so we’ll be watching all of this closely.
BTW, I guess the real question is whether or not you include Southwest in your annual “Airlines We Lost” post this year?
PHLLAX – The -700s are being retrofitted. They don’t get new seats, but they will lose a row to make room for extra legroom seating.
I hadn’t seen that, mostly because all the media has shown the 800/Max 8. Thanks for letting me know.
The dreaded 737-700. It seems like most of my SAN-LAS trips are on that old beast. They have horrible overhead baggage capacity.
Boeing just said today that they expect to get the Max 7 and 10 certified this year.
I know, I know.
But WN is salivating at the prospect of retiring a bunch of 700s that they have had to keep in service.
and, presumably, the 700s will offer the best of whatever WN puts in its aircraft interiors.
I remember going out of my way (driving an extra 30 mins to MDW) to fly WN because of their open seating, free baggage, and no change fees. This was when I traveled a ton domestically for work and most were last-minute trips. Flying AA, I’d get some middle seat in back and it was hell. With WN, I had a system and nearly always got a great seat. Even when they started changing the prioritization process (business select, early bird), it wasn’t hard to get in the A’s which guaranteed me a seat with adequate space. I’, 6’5″ so even the bad seats on WN were usually a lot better than seats on any competitor.
Now, the only reason I’d bother with WN is if they happen to be going to a destination that the others aren’t competitive in. Like, if I needed to go to LGB. Or some cities on the Gulf Coast. Otherwise, they’ve left me with absolutely no reason to pass up UA at ORD for WN at MDW/ORD/MKE. If enough people feel that way, they could be in trouble.
There is a niche market of passengers taking flights from various places in continental US to major airports (most prominently LAX) on a domestic itinerary, then flies internationally on a foreign carrier on a separate itinerary. This is a market in which people I know used to prioritize southwest by default, because they are trying to fly their life with them and flying southwest represented a $80 saving for 2 free bags – not anymore. I wonder if they’ll see this particularly impact early evening arrivals into LAX.
A vast majority of tickets already purchased before this date throughout the current booking window are already exempt from the new fees. Tickets purchased beyond 5/28 are now subjected to the new fees. They rolled it out now so when they make the switch to seat assignments the new online platform will include a prepaid option. They didn’t want to roll it all out at the same time as seat assignments so they decided to do it in stages and have a slow 8 months migration to workout all the kinks. While It’s seems like a Shitshow if you listen to the blogging mafia yet it was planned this way on purpose. Yesterday’s impact on airport staff and gates has been minimal because a majority of the passengers now throughout the peak summer travel period again will be exempt from baggage fees.
Again the only real SNFU was they don’t yet have a prepaid online option.
But from all the reviews from yesterday sounds like the prepaid online option will rollout later this year and will be Discounted by $5 on each bag on Inter island fees and $10 dollars on each bag domestic flight when you purchase your ticket.
Before Elliot was a thing WN was already ditching its open seating model because the FAKE Pre boarding problem was diluting the Business Select and Early bird Upsell by 72% or something year over year since Covid.
Elliot or no Elliot Southwest final saw real time Data from all the new sales platforms that even with their 2 Free Bags it wasn’t driving traffic there own in-house 3ed party estimated.
Southwest still had the most expansive spiderweb of point to point in the US. So once the sticker shock wears off everyone will resume flying Southwest vs the extra hours to a legacy Hub.
It is good to live in a hub! Don’t have to even consider WN, and my hub city is one of their largest.
“Basic doesn’t make money by being sold. It makes money by getting people to hate it so much that they’ll pay more for something else.” -CF
I’d just change this into WN has gotten me to hate it so much, I’ll probably never set foot on one of their jets again.
It’ll be interesting. It seems like Southwest will become the legacy airlines without First Class and other bells and whistles like TV screens.
Other than short haul flights where they have no competition, they might see lower booking because ot the lack of First Class seats andIt seems like First Class is what is keeping the big 3 profitable these days.
My guess is first class is just a matter of time.
Moreover, now that Southwest is a “normal” carrier, presumably we should be putting it into the choice set for M&A. For example, why not JetBlue + Southwest one day? Presumably Southwest, just as much as any other carrier, would benefit from a big NYC presence.
I used to thank every SWA employee I ran into for Southwest not making the passengers the enemy like all of the other airlines. The leaders at Southwest have made me their enemy and it has nothing to do with checked bags, seating, or even fares. It is just their new “F*** You” attitude. They probably think everything would be better if nobody showed up, and that may happen. Every Christmas I gave $500 SWA flight cards to my 5 children. Not next Christmas. And I flew exclusively on Southwest a number of times a year. If Southwest went where I was going, I flew SWA even from Phoenix to Maui . Since their change in attitude I have flown to Honolulu from Phoenix and back NOT on Southwest, Phoenix to Spokane NOT on Southwest. My only hope for Southwest is for somebody else to buy them and throw the board and leadership OUT and try to reestablish the superior customer oriented airline.
I think the biggest thing all of this does is just put a lot of people’s business in play – some flyers who would have looked to Southwest out of habit, or because of the checked bags allotment, or other features they liked are going to see WN as “just another airline out to get as much cash out of me as they can” now and take a harder look at what they get on WN versus competitors.
FLL will be the canary in the coal mine. WN is already behind both Spirit and JetBlue there, and (last data I saw) is barely above Delta in market share. And FLL has the cruise business, which means a lot of checked bags. Some of that business already did the math and found that those two bags rarely actually flew “free” – and more of them will be incentivized to do that now.
I don’t think this is the “beginning of the end” for Southwest, they still have a strong network and surprising brand loyalty with a lot of people. But passengers will not go gentle into that fee-laden good night, and the actual marginal revenue WN brings in with all of this is likely to be a lot less than Elliott and co. think it will be.
As I type this I’m on my second to last WGA segment (a week and a day from now will be my last). I don’t check bags often, but late 2023/early 2024 WN without status was as good as AA with AS 75K…and I’ll miss that. I’ve assisted with two moves now (one my own) via WN’s baggage allotment, and…now that’s not a thing.
This means that it’ll be a lot easier to get folks who previously booked exclusively WN to spill over to other airlines. Good news for Breeze and maybe even Avelo…and for AA/UA/DL…and for AS where the two compete.
This won’t be enough to, say, drop WN to 2nd place in AUS. But their days of coming into a market and inducing demand are over.