Introduction to Changes in Southwest Airlines’ Baggage Policy

Passengers check in for Southwest Airlines flights at Chicago Midway International Airport on Feb. 18, 2025 in Chicago, Illinois. Southwest Airlines customers have only one day to go before the company starts charging to check bags for the first time in more than half a century. Starting Wednesday, Southwest will end its blanket "two bags fly free" policy. It was a perk that was sacrosanct among customers and the airlines’ longtime executives alike, setting the airline apart from competitors.

Background and Rationale

But baggage fees brought in nearly $7.3 billion for U.S. airlines last year, according to federal data, and Southwest executives who have long vowed to hold onto the policy have been under pressure to raise revenue. The airline hasn’t yet said how much it will charge to check bags, but rivals generally charge about $35 or $40 for a first checked bag for domestic flights, though there are some exceptions.

Changes to Business Model

Along with starting to charge for checked bags, Southwest has announced major changes to its business model over the past year, like getting rid of open seating. The carrier is also debuting basic-economy tickets like those sold by Delta Air Lines, American Airlines, and United Airlines on Wednesday.

What is Changing?

Southwest will no longer offer two free checked bags with many tickets purchased on or after Wednesday. For tickets purchased before then, a Southwest spokesman said the carrier will honor the terms of those fares, like the two free checked bags. The fees will apply to its no-frills Basic, its Wanna Get Away Plus, and its Anytime fares.

Exemptions

Yes. Travelers with top-tier status in Southwest’s Rapid Rewards loyalty program will get two free checked bags, as will customers in the highest-level Business Select fares. Customers with a Southwest Airlines co-branded credit card and their travel companions booked together with the same card won’t get charged for their first standard checked bag. A-List frequent flyer members, the second-highest tier in the loyalty program, will also get their first bag checked free of charge.

New Fare Type: Basic

Southwest on Wednesday will also start selling basic-economy tickets. With the new Basic fare, customers won’t be able to make changes to their tickets, they’ll be among the last customers to board, and their fare credits will expire in six months, compared with 12 months for other ticket classes. In another change, the airline is ending its Wanna Get Away fare, which was the lowest tier ticket before the changes.

Assigned Seats

Southwest has been known for its open-seating model for decades. Loyalists often obsessively check in a day before their flight in hopes of scoring a favorable boarding slot. But later this year, Southwest says it will start selling tickets for flights in 2026 that will have seat assignments. It is also outfitting its planes with extra legroom seats, like many of its competitors, that fetch higher prices.

Handling the Changes

Southwest executives have told staff that they expect passengers to carry on more luggage (those policies for free carry-ons aren’t changing) and have said the airline is installing larger overhead bins on its Boeing fleet, which should help with an influx of carry-on bags. Executives have also said staff will get mobile bag-tag printers at gates and airport lobbies to assist customers.

Customer Reaction

Southwest can hardly post on social media — even about babies and puppies on board — without getting angry comments about the changed baggage policy. But CEO Bob Jordan told CNBC last month that the policy change announcement the company made on March 11 hasn’t deterred customers. "We have seen no book-down on that day or after that day," he said on "Squawk on the Street" on April 24.

Conclusion

In conclusion, Southwest Airlines is ending its long-standing policy of two free checked bags, starting Wednesday. The airline is making significant changes to its business model, including introducing basic-economy tickets and assigned seats. While some customers may be upset about the changes, the airline believes they are necessary to remain competitive and increase revenue.

FAQs

Q: When will Southwest Airlines start charging for checked bags?

A: Southwest Airlines will start charging for checked bags on Wednesday.

Q: How much will Southwest Airlines charge for checked bags?

A: The airline hasn’t yet announced the exact fee, but rivals generally charge about $35 or $40 for a first checked bag for domestic flights.

Q: Are there any exemptions from the baggage fee?

A: Yes, travelers with top-tier status in Southwest’s Rapid Rewards loyalty program, customers in the highest-level Business Select fares, and customers with a Southwest Airlines co-branded credit card will be exempt from the fee.

Q: Will Southwest Airlines still offer free carry-ons?

A: Yes, the airline’s policy on free carry-ons is not changing.

Q: How will Southwest Airlines handle the expected increase in carry-on bags?

A: The airline is installing larger overhead bins on its Boeing fleet and will provide staff with mobile bag-tag printers at gates and airport lobbies to assist customers.

Introduction to Daniel Lubetzky’s Investment Journey

Billionaire Daniel Lubetzky built his fortune on Kind snack bars made with nuts, fruits, and whole grains. He sold a controlling stake in Kind Snacks to food giant Mars in 2020. Through his family office Camino Partners, he has backed other popular consumer brands like fast-casual chain Cava, hair care brand Prose, and Belgian Boys breakfast items.

Expansion into New Areas

Camino, founded in 2023, has recently widened its focus to longevity, investing in fitness chain Barry’s and home health-care provider LiveWell. It is one of more than 100 family offices built on food and beverage fortunes, according to data provided exclusively by Fintrx, a private wealth intelligence platform. A growing class of family offices are expanding beyond their principals’ entrepreneurial roots in consumer packaged goods.

Other Family Offices

Another snack bar founder, RXBar’s Peter Rahal, has invested in X and biodegradable packaging firm Cove through his family office, Litani Ventures. Paul Merage, co-founder of the Hot Pockets’ parent company Chef America, started his family office after selling the frozen food manufacturer to Nestle in 2002. Today, Consolidated Investment Group has a sprawling real estate footprint in the U.S. and Israel through direct investments and joint ventures, including more than 25,000 apartment units in cities like Dallas and Denver.

Investing in Longevity

In the case of Camino, investing in longevity is a natural evolution, according to the investment firm’s president Elle Lanning, who has worked for Lubetzky since she joined Kind in 2010. "The way we think about it is consumer health typically starts with an education wave and then an availability wave. Food and nutrition was one of the first spaces where there started to be a consumer education wave," she said. "For us, Barry’s — like exercise as an impact on consumer health — is like a second wave to nutrition."

Investment Strategy

Camino has also shifted from early-stage companies to proven businesses, typically with at least $20 million in revenue. It deploys anywhere between $20 million to $80 million per company upfront or over time. Initially, Lubetzky wanted to invest in younger companies. "He loves to build from the ground up," Lanning said. However, she advised Lubetzky that early-stage investing comes with greater odds of failure and said he had to think of a struggling portfolio company like a product that is failing to sell.

Venturing Outside Consumer Packaged Goods

For Lubetzky, venturing outside consumer packaged goods means calling in experts. When investing in other growing areas like aerospace and deep tech, Camino typically does so through fund managers. "I think the reason why we have maybe done as well in life is we know what we know and we know what we don’t know," Lanning said, "and we try to make sure that the decisions we make are very informed by that."

Conclusion

Daniel Lubetzky’s investment journey is a testament to the evolving nature of family offices and their investment strategies. By expanding into new areas such as longevity and venturing outside consumer packaged goods, Camino Partners is positioning itself for long-term success.

FAQs

Q: What is Camino Partners, and what type of investments does it make?
A: Camino Partners is a family office founded by Daniel Lubetzky, and it invests in various consumer brands, including food, fitness, and health-care companies.
Q: Why did Camino Partners shift its focus from early-stage companies to proven businesses?
A: Camino Partners shifted its focus to reduce the risk of failure associated with early-stage investing and to invest in companies with a proven track record of success.
Q: What is the typical investment size for Camino Partners?
A: Camino Partners typically invests between $20 million to $80 million per company upfront or over time.
Q: Why does Camino Partners invest in fund managers when venturing outside consumer packaged goods?
A: Camino Partners invests in fund managers to leverage their expertise and reduce the risk associated with investing in unfamiliar areas such as aerospace and deep tech.

Introduction to The Picklr Facility

The Picklr facility in Salt Lake City, Utah, is part of a larger network known as Packlr, which is the world’s largest pickleball franchise. This franchise has announced its expansion into the Japanese market, marking a significant milestone in the growth of pickleball globally.

Expansion into Japan

The Picklr will open 20 new locations in Japan over the next five years through a strategic partnership with Nippon Pickleball Holdings, Japan’s leading pickleball company. This move is part of The Picklr CEO Jorge Barragan’s aggressive growth strategy, driven by the sport’s exponential growth. Pickleball has seen a 223% jump in participation over a three-year span, according to the Sports and Fitness Industry Association, making it the "fastest-growing" sport for several years running.

Current Operations and Future Plans

The Picklr currently operates 40 locations in the United States and Canada and expects this number to grow to 80 clubs by the end of the year. In total, the company has sold more than 500 franchises in the U.S., Canada, and Japan that are slated to open over the next 5 years. The clubs offer court reservations and host clinics, leagues, tournaments, and private events, operating on a membership model with most clubs averaging between 500 and 700 members.

Market Strategy and Expansion

Barragan believes Japan will serve as a launching pad for the broader Asia market, citing the country’s focus on health, community, and love for racket sports as key factors. The first Japanese Picklr facility is slated to open in the Tokyo metro area, followed by additional locations throughout the country, primarily in retail, office, and light-industrial buildings.

Industry Trends and Future Outlook

The professional pickleball leagues are also looking for international growth, with the United Pickleball Association announcing plans to expand its tour to include events in Australia, India, Canada, Asia, and Europe. Barragan does not see the pickleball trend letting up anytime soon, with over 220 leads monthly, many of which are international. This sustained interest is a testament to the sport’s growing popularity worldwide.

Conclusion

The expansion of The Picklr into Japan marks a significant step in the global growth of pickleball. With its aggressive growth strategy and strategic partnerships, The Picklr is poised to capitalize on the sport’s exponential growth. As pickleball continues to gain popularity, it’s likely that The Picklr and other pickleball franchises will play a key role in shaping the sport’s future.

FAQs

Q: What is The Picklr?

A: The Picklr is a network of indoor pickleball clubs that offers court reservations, clinics, leagues, tournaments, and private events, operating on a membership model.

Q: How many locations does The Picklr currently operate?

A: The Picklr currently operates 40 locations in the United States and Canada.

Q: What are The Picklr’s expansion plans?

A: The Picklr plans to open 20 new locations in Japan over the next five years and has sold more than 500 franchises in the U.S., Canada, and Japan to open over the next 5 years.

Q: Why is Japan a key market for The Picklr’s expansion?

A: Japan is seen as a launching pad for the broader Asia market due to its focus on health, community, and love for racket sports.

Q: What is the current state of pickleball’s popularity?

A: Pickleball has seen a 223% jump in participation over a three-year span, making it the "fastest-growing" sport for several years running, with over 20 million players in the U.S. alone.