Southwest Could Start Charging For Checked Bags, Says CEO

While its competitors have been nickle/diming travelers for years with checked-bag fees, Southwest has done its best to equate its brand with the slogan “bags fly free.” But the airline’s CEO now says that he’s not completely averse to the whole notion of making a mountain of cash off baggage fees.

According to the Wall Street Journal, Southwest CEO Gary Kelly said yesterday that if air travelers get to the point where they expect or even prefer a la carte airfares — wherein everything but your seat is an additional charge — “we’d be crazy not to provide our customers with what they want.”

Southwest has long allowed for each passenger to check two free bags on flights, which has helped it stand out from the rest of the industry. But at the same time, revenue from checked bags has mushroomed from $464 in 2007 to almost $3.5 billion in 2012. For all the business that Southwest gets because of its free bag policy, the airline has to be looking at that number and wishing it could get a piece.

Kelly himself has previously stated that instituting checked bag fees would cost Southwest $1 billion a year in lost ticket sales from ticked-off customers. That said, if all the other airlines are doing it, where are the angry customers going to flee if Southwest does decide to start charging for checked bags?

The Journal points out that the public opinion of baggage fees is still largely negative, with only 37% of travelers saying the charges were reasonable, while also noting that this is up from 18% only two years earlier.

One line of thought on checked bags is that Southwest is effectively charging the fee with higher airfares, while the other carriers are giving travelers the option of paying less for their tickets if they don’t check bags. We just did a spot-comparison of some Southwest fares between New York and San Francisco and found that the airline is offering seats at or below the prices charged by airlines with checked bag fees. In some cases, Southwest was charging hundreds of dollars less than its competitors.

Kelly says that Southwest will continue with its current two-bag policy at least through next year, so don’t worry about being hit with fees when you take your holiday trip on Southwest to visit the family in Florida.

The airline has been getting a taste of that sweet, sweet baggage fee money by not allowing flights operated under the AirTran brand to continue charging for bags. In fact, the company raised those charges in late 2012, but plans to eliminate them once the AirTran business has been fully absorbed into Southwest.