Southwest Airlines Co. is asking customers for feedback on possible changes to its free checked baggage policy, suggesting the airline may eliminate another of its key perks as it battles an activist investor.
The company has been surveying selected members and customers of its loyalty program since last week about hypothetical scenarios in which baggage fees would be introduced for cheaper fares. The questionnaire, part of which was viewed by Bloomberg and confirmed by the airline, opinions were also sought on travel habits, loyalty status benefits and booking preferences.
Southwest has long maintained its “baggage flies free” policy, which airline executives say sets it apart from the competition – it is the only major U.S. airline that allows passengers to check two bags for free. CEO Bob Jordan said on the company’s April conference call that a change was not being considered at the time “because people choose Southwest Airlines because we don’t charge baggage fees.”
The airline announced Bloomberg this week that while the questionnaire focuses more on baggage policies than previous surveys, it does not reflect any impending change. The company continues to survey customers.
“There is currently no work underway to change our industry-leading policy of checking two bags free, but it is important to us to know what matters most to our customers,” Southwest said in a statement. “We will continue to monitor stakeholder sentiment on many aspects of our business model to ensure we remain competitive and responsive to customer preferences.”
Part of the customer survey described a hypothetical arrangement where the cheapest “Wanna Get Away” fares would only include one personal item and one carry-on bag, while “Wanna Get Away Plus” would include one free checked bag. The more expensive categories – Anytime and Business Select – would still include two free checked bags.
Southwest has already made significant changes to its business model, announcing last month that it would abandon its seating policy, add a new premium class and introduce overnight flights. The moves were announced amid increasing pressure from activist investor Elliott Investment Management to fire the airline’s top executives, reshuffle its board and conduct a thorough business review to modernize the airline.
Elliott, who disclosed in June that he owns a large stake in the airline, has largely avoided calls for specific policy changes but has criticized Southwest for failing to capitalize on some potential revenue streams. Global baggage fee revenue rose to an estimated $33.3 billion last year.
Southwest will hold an investor meeting in Dallas on September 26 to detail a series of planned changes designed to better meet travelers’ preferences and increase profits.
Mary Schlangenstein for Bloomberg
