Southwest Won’t Rule Out Baggage Fees

by Christopher Freeburn | October 25, 2013 11:35 am

Southwest 300x188 Southwest Won't Rule Out Baggage Fees[1]Passengers on Southwest Airlines (LUV[2]) flights could eventually end up paying fees for checked baggage[3].

During a recent conference call, the carrier’s CEO signaled that the airline — one of only two big carriers that have not yet implemented baggage fees — could adopt the charges if fliers don’t resist them at other airlines. Though Southwest won’t add the fees until the end of next year at the earliest, Gary Kelly said that the airline would “be crazy” not to offer its customers an “a la carte approach” if they show a preference for such pricing, the Wall Street Journal notes.

Right now, Southwest sees its policy of allowing passengers to carry two checked bags for free as drawing more passengers. In fact, the airline has made the two free bags policy a major feature of its marketing campaign, which includes the tagline “bags fly free.”

One analyst noted that Southwest was “missing out on tens of millions of dollars” in annual revenue for the fees, which have become standard at other airlines. According to government data, U.S. carriers generated $3.5 billion in bag fees in 2012, compared to just $464 million in 2007

Only one other carrier, discount airline JetBlue (JBLU[4]), currently allows passengers to bring at least one checked bag along without a fee.

Shares of Southwest Airlines rose modestly in Friday morning trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2011/11/Southwest.jpg
  2. LUV: http://studio-5.financialcontent.com/investplace/quote?Symbol=LUV
  3. eventually end up paying fees for checked baggage: http://online.wsj.com/news/articles/SB10001424052702304799404579155741368853418
  4. JBLU: http://studio-5.financialcontent.com/investplace/quote?Symbol=JBLU

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