Southwest Airlines is doing away with free checked bags, a move that will largely align its business model with competitors. Currently, all Southwest flyers get two free checked bags.
Bag fees will take effect for flights booked beginning May 28. The carrier has yet to reveal the amount of the charge.
Like its largest U.S. competitors, Southwest will continue to allow one free checked bag to holders of its co-branded credit cards. Flyers with Rapid Rewards A-List status will also get one free checked bag.
Customers with A-List preferred status and those who purchase Southwest's priciest Business Select fare will get two free checked bags.
The move comes as activist shareholder Elliott Investment Management appears to be pressuring Southwest to speed its pace of change. The airline had already planned to institute reserved seating and sell extra-legroom seats next year.
When Southwest announced a three-year transformation plan last September, executives were resolute that the airline would not get rid of free checked bags, noting that the airline's market studies had shown that the policy generates market-share gains in excess of lost revenue from not charging for bags.
Jordan, now working for a remade board that is strongly influenced by Elliott, had different words in a prepared remark on Tuesday.
"We have tremendous opportunity to meet current and future customer needs, attract new customer segments we don't compete for today, and return to the levels of profitability that both we and our shareholders expect," he said.
Unexpired flight credits? Gone
The addition of bag fees is just one of the changes announced by Southwest on Tuesday.
The airline will also roll back a policy put in place in 2022 in which flight credits do not expire. Beginning May 28, flight credits will expire one year from the date of ticketing for most fares.
They'll expire after six months for the new Basic fare category that Southwest also announced on Tuesday, with that same May 28 launch date. The carrier hasn't unveiled other details about the Basic fare. Basic economy fares at other airlines usually come with restrictions on selecting seats -- a feature that couldn't apply at Southwest until next year. But under its existing open-seating policy, Southwest could give purchasers of basic fares a late boarding assignment. Some airline also limit loyalty point accrual for basic fares.
The changes on Tuesday followed a similarly customer-unfriendly change last week, when Southwest slashed Rapid Rewards accrual on its Wanna Get Away and Wanna Get Away Plus fares.
Southwest also said Tuesday that it will change Rapid Rewards redemption, introducing variable redemption rates across higher-demand and lower-demand flights. Currently, Rapid Rewards points act similar to cash for redemptions, with the redemption cost correlating on all routes to a ticket's cash cost.
Jordan sought to reassure flyers about Southwest's customer service.
"We will do all this while remaining focused on what's made us strong -- our people and the authentic, friendly and award-winning customer service only they can provide," he said.