Southwest Airlines to Charge for Checked Luggage, Ends "Two Bags Fly Free" Policy

Southwest Airlines announced on Tuesday that it will start charging customers to check their luggage, marking a significant shift away from its long-standing "two bags fly free" policy. The airline will begin charging for checked bags on tickets purchased on or after May 28.

The move is part of a broader plan by Southwest to ditch its customer perks and policies in an effort to increase revenue. The airline has been under pressure from activist hedge fund Elliott Investment Management to raise revenue and improve returns.

Who Will Pay for Bags?

Travelers who purchase any ticket except for Southwest’s top-level Business Select fare will have to pay fees to check bags. Customers who buy a Business Select ticket will still be able to check two bags for free. Top-tier A-List Preferred frequent flyer program members will also get two checked bags for free, as will those with a Southwest credit card.

How Much Will it Cost to Check a Bag?

Southwest didn’t disclose the exact cost to check a bag, but fees start at $35 per bag on competitors Delta, United, and American Airlines.

When Do the New Policies Take Effect?

The new checked baggage fees will go into effect for tickets purchased on or after May 28.

Can I Still Bring a Carry-On Bag?

Carry-on bag policies haven’t changed, even for basic economy tickets. All tickets will include a free carry-on bag, even for the new basic economy tickets.

But Won’t Everyone Else Bring a Carry-On Bag, Too?

Southwest has warned that customers will "undoubtedly carry on more luggage than before" and is taking steps to keep things moving. The airline will get mobile bag-tag printers and design new carry-on size guides to help customers check if their luggage fits as a carry-on.

Will There Be Longer Airport Lines?

Possibly. Southwest said it may redistribute staff to handle changing customer needs with the new bag rules and will equip staff with mobile printers. Airport lobbies will also see changes, with staff possibly handling longer transaction and queue times.

Why is This Happening?

Southwest has been under increasing pressure to raise revenue and improve returns after activist hedge fund Elliott Investment Management took a stake in the airline last year. Southwest executives have long told investors and customers that its "two bags fly free" policy is sacrosanct, setting it apart from competitors.

What Else is Happening?

Southwest is launching a basic economy fare that is not refundable and doesn’t allow for changes. It won’t allow for same-day standby tickets. Flight credits for those "basic" tickets, if unused, will expire in six months, while credits for other flights will expire in 12 months.

Conclusion

Southwest Airlines’ decision to charge for checked luggage marks a significant shift away from its long-standing "two bags fly free" policy. The airline is trying to increase revenue and improve returns, but the move may lead to longer airport lines and changed customer behavior. As the airline continues to adapt to a competitive market, it remains to be seen how its new policies will impact customer satisfaction and loyalty.

Frequently Asked Questions

Q: When do the new checked baggage fees go into effect?
A: The new checked baggage fees will go into effect for tickets purchased on or after May 28.

Q: Who will have to pay for checked bags?
A: Travelers who purchase any ticket except for Southwest’s top-level Business Select fare will have to pay fees to check bags.

Q: How much will it cost to check a bag?
A: Southwest didn’t disclose the exact cost to check a bag, but fees start at $35 per bag on competitors Delta, United, and American Airlines.

Q: Can I still bring a carry-on bag?
A: Yes, carry-on bag policies haven’t changed, even for basic economy tickets. All tickets will include a free carry-on bag, even for the new basic economy tickets.

Introduction

Are you a New York employer struggling to balance the needs of your business with the needs of your employees? The new paid family leave law in New York is set to revolutionize the way employers support their employees’ family lives. As of January 1, 2020, New York State has implemented a comprehensive paid family leave law, which provides eligible employees with up to 12 weeks of paid leave to care for a loved one.

The New Law: What’s Changing?

The new law, known as the New York Paid Family Leave (NYPFL) Program, is a significant expansion of the existing Family and Medical Leave Act (FMLA). Under the new law, eligible employees are entitled to take up to 12 weeks of paid family leave to care for a seriously ill family member, a new child, or to bond with a new child.

Key Changes Under the New Law

Here are the key changes under the new law:

• Eligibility

  To be eligible for NYPFL, an employee must have worked for at least 26 weeks in the 52 weeks preceding the start of leave. The employee must also have earned at least 7 times the weekly benefit amount in the 52 weeks preceding the start of leave.

• Benefits

  Benefits under the NYPFL Program are equal to 67% of an employee’s average weekly wage, up to a maximum of $1,000 per week.

• Job Protection

  Employees taking leave under NYPFL are entitled to job protection, meaning they must be restored to their previous job or a comparable position with the same pay, benefits, and other employment terms.

• Paid Leave Types

  There are three types of paid leave under NYPFL: (1) family care, which allows employees to care for a seriously ill family member; (2) parental care, which allows employees to bond with a new child; and (3) family bereavement, which allows employees to care for a deceased family member.

How Does the New Law Affect Employers?

While the new law is designed to benefit employees, it also presents challenges for employers. Here are some key considerations for employers:

Key Challenges for Employers

• Increased Absence and Turnover

  With more employees taking paid leave, employers may see an increase in absenteeism and turnover, which can impact productivity and morale.

• Staffing and Scheduling

  With employees out on leave, employers may need to adjust staffing and scheduling to ensure business continuity.

• Compliance and Record-Keeping

  Employers must comply with the new law’s requirements, including maintaining accurate records of employee leave and providing notice to employees.

Best Practices for Employers

To minimize the impact of the new law on your business, consider the following best practices:

Best Practices for Employers

• Develop a Leave Management Policy

  Create a comprehensive leave management policy that outlines the process for requesting and approving leave, as well as maintaining accurate records.

• Communicate with Employees

  Ensure that employees are informed about the new law and the benefits it provides, as well as the process for requesting and approving leave.

• Plan Ahead

  Anticipate the potential impact of the new law on your business and develop strategies to minimize the disruption.

Conclusion

The new paid family leave law in New York is a significant change for employers, but it’s also an opportunity to support the well-being of your employees and their families. By understanding the key changes under the new law and implementing best practices, you can minimize the impact on your business while ensuring that your employees receive the support they need.

FAQs

Q: What is the effective date of the new paid family leave law in New York?
A: January 1, 2020

Q: How many weeks of paid family leave is an eligible employee entitled to under the new law?
A: Up to 12 weeks

Q: What is the maximum weekly benefit amount under the new law?
A: $1,000 per week

Q: Do employees have job protection under the new law?
A: Yes, employees taking leave under NYPFL are entitled to job protection, meaning they must be restored to their previous job or a comparable position with the same pay, benefits, and other employment terms.

Q: What is the process for requesting and approving leave under the new law?
A: Employees must provide 30 days’ notice to their employer, unless the employer waives this requirement. Employers must approve or deny leave requests in writing.

Q: How does an employer know whether an employee is eligible for paid family leave?
A: Employers can use the NYPFL online calculator to determine an employee’s eligibility.

Additional Resources

For more information on the new paid family leave law in New York, visit the New York State Department of Labor’s website at www.labor.ny.gov.

Groundbreaking Changes at Southwest Airlines: A Shift in Customer Perks

It’s happening: Southwest Airlines will start charging passengers to check bags for the first time.

This stunning reversal shows the low-cost pioneer is willing to part with a customer perk executives have said set it apart from rivals for more than half a century of flying in hopes of increasing revenue.

Southwest’s changes come after months of pressure from activist investor Elliott Investment Management, which took a stake in the airline last year and won five board seats as it pushed for quick changes at the company, which held on for decades to perks like free checked bags, changeable tickets, and open seating.

For tickets purchased on or after May 28, Southwest customers in all but the top-tier fare class will have to pay to check bags, though there will be exceptions. Elite frequent flyers who hold A-List Preferred status will still get two bags, and A-List level members will get one free checked bag. Southwest credit card holders will also get one free checked bag.

"Two bags fly free" is a registered trademark on Southwest’s website. But its decision to about-face on what executives long cast as a sacrosanct passenger perk brings the largest U.S. domestic carrier in line with its rivals, which together generated more than $5 billion from bag fees last year, according to federal data.

Southwest didn’t say how much it plans to charge to check bags, but a single bag costs $35 to check on Delta, American, and United.

Southwest shares rose 8% Tuesday after its baggage fee announcement and investor update, while other large carriers’ shares and the broader market fell.

Read more CNBC airline news

Southwest executives have long said they didn’t plan to charge for bags, telling Wall Street analysts that it was a major reason why customers chose the airline.

At an investor day in September, Southwest said that it would gain between $1 billion and $1.5 billion from charging for bags but lose $1.8 billion of market share. Southwest said its "rigorous research" found that "our ‘bags fly free’ policy generates market share gains in excess of potential lost revenue from bag fees."

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Conclusion

Southwest Airlines’ decision to charge for checked bags marks a significant shift in its business strategy. The move is likely to impact customer behavior and loyalty, and may lead to a re-evaluation of the airline’s competitive position in the market. As the airline industry continues to evolve, it will be interesting to see how Southwest’s decision plays out and what impact it has on the broader industry.

Frequently Asked Questions

Q: Why is Southwest Airlines charging for checked bags?
A: Southwest is charging for checked bags to increase revenue and reduce costs.

Q: How much will Southwest charge for checked bags?
A: The airline hasn’t announced its bag fees, but a single bag costs $35 to check on Delta, American, and United.

Q: What are the exceptions to the bag fee?
A: Elite frequent flyers who hold A-List Preferred status will still get two bags, and A-List level members will get one free checked bag. Southwest credit card holders will also get one free checked bag.

Q: How will this change affect customer behavior and loyalty?
A: It’s too early to tell, but the change may lead to a re-evaluation of customer loyalty and behavior.