Southwest Airlines, known for its industry-leading policy of offering two free checked bags, is now exploring the possibility of implementing bag fees. Through a recent survey, the airline is gauging customer sentiment on the potential introduction of charges for checked bags. The survey includes various scenarios, such as different fare options that may or may not include checked bag fees.
According to reports, Southwest Airlines initiated the survey to gather insights on customer preferences, travel habits, booking choices, and loyalty benefits. While the airline affirmed that there are no immediate plans to change its current baggage policy, it values customer feedback to stay competitive and aligned with consumer preferences. Southwest recognizes that its “bags fly free” policy is a significant factor driving customer loyalty and choices.
In a bid to improve profit margins, Southwest announced plans to transition from open-seating to assigned seating and introduce extra-legroom seats. These initiatives aim to generate additional revenue streams and enhance the overall customer experience. However, the airline’s CEO, Bob Jordan, reiterated that the inclusion of checked bags in the fare will remain unchanged due to its importance to customers.
Southwest Airlines faces pressure from Elliott Investment Management, an activist investment firm that holds an 11% stake in the company. Elliott has raised concerns about the airline’s business model and advocated for changes to boost profitability. The firm’s proposed board members and potential proxy battle underscore the growing tension between stakeholders and Southwest’s leadership.
As Southwest Airlines navigates the evolving landscape of the airline industry, it must strike a balance between implementing strategic changes to drive growth and preserving its customer-centric approach. By understanding customer sentiment through surveys and feedback, Southwest can make informed decisions that align with customer preferences while ensuring long-term success and competitiveness in the market.