Southwest Airlines made groundbreaking changes earlier this year when it ended its long-standing “bag-free fly” policy and began charging passengers to check bags. The move comes as the troubled airline looks to boost overall profits. However, that didn’t happen this year.
Despite Southwest Airlines’ decision to start charging passengers for checked bags, the airline’s full-year profits fell sharply.
For decades, Southwest has allowed all passengers to carry up to two checked bags for free. However, back in May, the airline officially ended the policy.
In May, Southwest Airlines officially imposed a checked baggage fee of $35 for the first bag and $45 for each additional checked bag.
It’s the most high-profile change Southwest is making this year as it embarks on a major brand overhaul.
Although Southwest Airlines gave up free bags in an attempt to increase profits, it didn’t realize those profits in the first nine months of the year.
According to CNBC, Southwest Airlines announced that profits in the first nine months of this year actually fell 42%.
The latest reported profit decline comes after Southwest Airlines reported no significant growth in checked baggage fee revenue in August. In fact, executives acknowledged that sales of basic economy fell sharply immediately after the checked bag fee was introduced, a sign that customers were fed up with the new fees.
Southwest CEO Bob Jordan has been optimistic about the hypothetical revenue expected from these new bag fees, but the numbers simply don’t support that reality.
Notably, Southwest’s stock has been soaring despite declining profits, thanks in large part to changes the airline is making, such as assigned seating and premium seating options that will officially launch next year.
“Because of the assigned seats, the extra legroom, there’s certainly a lot of value, [results are] “The bookings we’re seeing reflect the business case for assigned seats and extra legroom,” Southwest CEO Bob Jordan told CNBC earlier this month.
However, even if Southwest’s future prospects do look promising to investors, one expert points out that no matter what executives say, baggage fees aren’t the real reason for it.
“A month after selling the ‘Basic Economy’ product, they saw a 0.5 percentage point drop in revenue per available seat mile, and that also had to do with baggage charges,” said Going travel expert Katy Nastro. Customer experience diving Back in August. “While they say baggage fees look healthy, they may have to discount base fares due to weak demand, meaning they won’t make a net profit from baggage fees.”
This article was originally published by Men’s Journal on December 24, 2025, and first appeared in the Travel section. Click here to add Men’s Diary as your go-to source.