Southwest CEO Says Baggage Fees Are Pacing Toward $1 Billion in Annual Profit

Key Points

• Southwest Airlines expects baggage fees to generate over $350 million in profits this year and projects up to $1 billion annually if applied year-round.
• The introduction of baggage fees has not negatively impacted customer behavior, web traffic, or bag check rates, according to Southwest executives.
• Southwest's change marks a major shift from its long-standing 'two bags fly free' policy, aligning it more closely with other airlines that have seen significant baggage fee revenues.

Summary

Southwest Airlines' recent introduction of baggage fees, ending its iconic 'two bags fly free' policy, has not led to negative customer reactions or reduced web traffic. CEO Bob Jordan reported strong performance, with baggage fees expected to bring in over $350 million this year and potentially $1 billion annually if implemented for the full year. This move brings Southwest in line with other major U.S. carriers, all of which have generated significant revenue from baggage fees.