Southwest Ends Free Bags, Frontier and American Roll Out New Deals

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Key Takeaways

• Southwest Airlines will charge for checked luggage starting May 28, 2025, ending the “Bags Fly Free” policy.
• CEO Bob Jordan cited passenger preferences for lower ticket prices and financial pressure from Elliott Investment Management for the policy change.
• The policy shift may normalize luggage fees industry-wide, while rivals like Frontier aim to attract disillusioned Southwest customers with new perks.

In a major shake-up for U.S. travelers, Southwest Airlines has announced the termination of its long-standing “Bags Fly Free” policy. The airline, which has been synonymous with offering two free checked bags for decades, will begin charging for checked luggage on flights booked from May 28, 2025. The announcement, made on March 11, 2025, has already set off a ripple effect across the aviation industry. Rivals like Frontier Airlines and American Airlines are reacting by either introducing new perks or holding steady, each with an eye on capturing market share. The change signals a new chapter not just for Southwest but also for a more fee-laden, competitive airline environment.

Southwest Ends Free Bags, Frontier and American Roll Out New Deals

A Chapter Closes: Southwest Bids Farewell to “Bags Fly Free”

Southwest Airlines has long marketed itself as the customer-friendly airline, with free checked bags serving as one of its most attractive policies. This benefit, rooted in its foundational days in 1971, not only gave travelers financial relief but streamlined services like boarding by reducing the number of carry-ons, thus creating goodwill among flyers of all kinds—from families to budget-conscious travelers.

The “Bags Fly Free” policy was so central to Southwest’s identity that it became one of the most recognizable slogans in the industry. While most airlines began charging fees for checked luggage after 2008’s financial crisis, Southwest became a holdout, underscoring its focus on simplicity and transparency. By allowing two free checked bags per passenger, the airline retained loyal customer support in an era of rising ticket fees and add-on charges.

However, as part of a restructuring plan influenced by activist investor Elliott Investment Management, Southwest announced it could no longer maintain this policy. CEO Bob Jordan explained that eliminating free bag allowances was necessary to ensure the company’s long-term survival and financial health. While this strategy aligns Southwest with industry norms, the departure from such a celebrated offering also reflects significant risks for the airline’s reputation and customer trust.

Why Southwest is Making This Move

The decision to charge for checked bags follows a broader financial overhaul within Southwest. By 2024, the airline was under pressure to optimize operations and enhance profitability in response to mounting pressure from Elliott Investment Management. This led not just to the scrapping of the “Bags Fly Free” policy but also workforce cuts, including the layoff of 1,750 employees, which amounted to 15% of its corporate workforce.

Bob Jordan clarified that revoking the free baggage policy was based on extensive consumer research. According to Southwest, most passengers prioritize lower ticket prices over complimentary perks like baggage allowances. By aligning its operations with competitors that monetize checked luggage, the airline expects to generate an additional revenue stream which could bolster its overall financial standing.

Even so, some worry that this pivot compromises Southwest’s identity as a disruptor. For decades, Southwest built trust by carving a niche as “different” from the big three airlines—Delta Air Lines, American Airlines, and United Airlines—all of which charge luggage fees. By imposing similar charges, Southwest runs the risk of blending into the existing market. Will this strategic gamble pave the way to sustained revenue growth, or will it alienate a loyal customer base that once saw the airline as an oasis of transparency and traveler-friendly policies?

Industry Repercussions and Market Dynamics

Southwest’s new policy carries wide-ranging implications for the airline industry. For years, its free luggage offering forced competitors to differentiate themselves in other ways, such as through frequent flyer programs, premium experiences, or expanded international routes. With Southwest now charging for bags, rivals have an opening to attract customers disillusioned by the policy reversal.

Many industry insiders predict an all-new battle to reconfigure loyalty among travelers. Delta Air Lines, for instance, has directly targeted Southwest customers by highlighting gaps left by the airline’s policy change. Other competitors are addressing broader market demands by reimagining loyalty initiatives to maintain or win over passengers put off by rising costs.

Moreover, by eliminating its hallmark no-fee policy, Southwest may inadvertently normalize fees in air travel, even for items that are often seen as “essential” by passengers. It will remove an alternative choice for flyers seeking hassle-free, low-cost flying experiences. Airlines that previously hesitated to enforce or expand baggage fees may now find greater flexibility in introducing them without fear of backlash, potentially establishing baggage charges as a fixture of U.S. air travel.

Frontier Airlines’ Opportunity: A Bold Strategy for Change

As Southwest grapples with the fallout of its policy shift, Frontier Airlines has moved quickly to leverage the situation. Frontier, already known for its low-cost offerings, is aggressively repositioning its brand to stand out by offering more targeted benefits to its loyal customers. Its “The New Frontier” initiative signals a redefined focus on value-adds that balance affordability with perks.

Highlights of Frontier Airlines’ new moves include:

First-Class Seating Debuts: By late 2025, Frontier will introduce first-class seating, marking a dramatic pivot from its low-budget origins. These premium seats aim to cater to slightly higher-income travelers seeking a comfortable experience without the premium price often tied to luxury carriers.
Enhanced Loyalty Perks: Top-tier loyalty members, such as those holding Platinum status, will now enjoy bolder perks like unlimited free travel for a companion on any ticket booked. These benefits are designed to attract frequent flyers who see mileage rewards as key to their travel planning.
Flexible Mile-Use Programs: Travelers enrolled in Frontier’s loyalty program will also have greater flexibility in spending frequent flyer miles. Starting mid-2025, customers can redeem miles not just for flights but also for items like baggage fees or upgraded seating, making the program more dynamic for a variety of needs.

Frontier’s shift toward a more hybrid model—keeping its no-frills approach on some routes but offering elevated service for its most loyal flyers—positions it as an attractive alternative for customers frustrated with Southwest’s changes or uninterested in being locked into big-three airline programs.

How American Airlines Fits In

While the changes from Southwest and Frontier make headlines, American Airlines appears to be taking a more conservative approach. Rather than rolling out bold new features, its strategy focuses on stability. By continuing to charge for checked bags at variable rates depending on ticket type, American reinforces its presence as a traditional full-service airline.

However, American’s strategy means it’s forgoing the chance to specifically appeal to customers upset over Southwest Airlines’ policy change. This restrained positioning could leave the airline vulnerable to competitors like Frontier, who are actively reconfiguring loyalty programs for greater customer value.

Still, American Airlines’ focus on in-flight amenities and an expansive international route network may make it a consistent choice for those seeking global connectivity and quality service, even at higher costs.

Mixed Reactions from Customers and Observers

Travelers have met Southwest’s policy shift with criticism, signaling the loss of goodwill that such an iconic policy cultivated over decades. Many customers lament the airline’s decision to prioritize higher profits at the expense of its customer-friendly image. Without the free bag advantage, some fear that Southwest is becoming indistinguishable from its competitors.

Conversely, Frontier Airlines has garnered attention for its proactive stance. Industry observers foresee its strategy potentially reshaping loyalty conversations, especially as air travel becomes increasingly rewards-driven. Travelers receptive to loyalty upgrades or family-friendly discounts may now see Frontier as a fresh option.

However, other frequent flyers may face decision fatigue as they sift through an increasing number of airline perks, loyalty tiers, and variable fees. Analysts warn that such short-term wins may require airlines to continually innovate if they aim to sustain customer engagement in a costly and highly competitive landscape.

Looking Ahead: Change in the Skies

The ending of Southwest Airlines’ “Bags Fly Free” policy marks a defining transition both for the airline and the industry. While increasing competitiveness and enhanced revenues might bolster Southwest’s bottom line, the erosion of its most unique selling point raises questions about lasting customer trust.

Meanwhile, Frontier Airlines’ timely enhancements emphasize its ability to cater to an overlooked middle ground. With bold offerings like first-class seats and unlimited companion tickets, it may disrupt the notion of low-cost airlines as destinations only for budget-conscious flyers.

The transformations across Southwest Airlines, Frontier Airlines, and American Airlines all underscore a truth about modern air travel: The battle for customers is no longer solely about ticket price. Airlines must now tailor their strategies to changing consumer expectations while navigating trade-offs between profit margins and goodwill. As competition continues to reshape the skies, one thing seems certain—travelers will face a transformed landscape, choosing not just how they fly but with whom they place their loyalty.

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Activist Investor → An individual or group influencing company decisions to increase shareholder value, often pressing for significant changes.
Frequent Flyer Program → A loyalty initiative airlines offer, rewarding passengers with points or perks for repeat travel.
Revenue Stream → A source of consistent income for a company, such as fees or services generating financial growth.
Customer-Friendly Image → A branding strategy showcasing dedication to providing excellent, accommodating services that prioritize customer satisfaction.
Loyalty Initiative → A program designed to encourage repeat business by offering rewards, perks, or benefits to returning customers.

This Article in a Nutshell

Southwest Ends Iconic “Bags Fly Free” Policy: What It Means

Southwest Airlines, famed for its no-fee baggage legacy, will introduce luggage charges starting May 2025. This marks a shift toward industry norms, prioritizing revenue over goodwill. Travelers now face fewer budget-friendly options, while competitors like Frontier innovate with loyalty perks. The skies are evolving—customer loyalty hangs in the balance.