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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.
Travelers use a Southwest Airlines Co. self-check-in kiosk at Logan International Airport in Boston. ( Scott Eisen/Bloomberg via Getty Images / Getty Images)
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.
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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.
A United Airlines Boeing 777 passenger aircraft at Denver International Airport in Denver. (Robert Alexander/Getty Images / Getty Images)
“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.
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Delta President Glen Hauenstein also offered his thoughts on Southwest’s decision during Delta’s presentation at the conference.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LUV | SOUTHWEST AIRLINES CO. | 30.01 | -0.34 | -1.12% |
| DAL | DELTA AIR LINES INC. | 45.38 | -1.29 | -2.77% |
| UAL | UNITED AIRLINES HOLDINGS INC. | 72.57 | -3.49 | -4.59% |
“I think clearly there are some customers who chose them because of that and now those customers are up for grabs,” he said. “We’ll see how that plays out over the next period of time as they continue to implement multiple changes to their products. Some good for customers, I think, the assigned seating, of course, probably by many business travelers, the premium economy seats liked and clearly so it’s a mixed bag with their transitioning to more of a legacy carrier, and they’re in that transition.”
On Tuesday, Southwest also said its “lowest priced tickets” bought on or after May 28 would have a new Basic fare.
A Southwest Airlines Boeing 737 Max 8 aircraft departs from Los Angeles International Airport. (Kevin Carter/Getty Images / Getty Images)
The carrier previously indicated it also has plans to start assigning seats and offering premium seating options on all flights, a departure from its opening seating and all-economy-class cabin.
Southwest CEO Bob Jordan said Tuesday at the conference that the company’s efforts to introduce assigned seating and premium seating were “on track, both the technology and the fleet modifications.”
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He said the company “refined our planned sell date for those products to third quarter of this year and the operation is now planned to begin in the first quarter of 2026.”
FOX Business’ Daniella Genovese contributed to this report.
