Southwest Didn't See More Profit After Ending Free Bags

Earlier this year, Southwest Airlines made the controversial decision to end its longstanding "bags fly free" policy as the airline began charging customers for each checked bag in an attempt to boost slumping profits. However, it doesn't sound like the move boosted profits the way the airline had hoped.

In May, Southwest Airlines officially began charging for checked baggage, with the first bag costing travelers $35 and an additional bag costing $45. While the airline rolled out the new fees in an attempt to boost profits, it doesn't sound like it's actually worked out that way.

On a Q2 2025 earnings call last week, Southwest Airlines Chief Operating Officer Andrew Watterson had a rather telling admission about the new bag fees as he admitted that the airline “did not see a measurable customer impact in the period between the announcement of these changes back in March and the implementation in late May.”

Southwest Airlines posted second-quarter earnings that were not exactly optimistic. According to CNBC, Southwest Airlines posted net income of $213 million, which is down 42 percent over last year.

In fact, if anything, it sounds like the new bag fees led to more problems for Southwest, with Watterson admitting “a temporary decline in bookings, primarily in basic economy” in the days following the rollout of basic economy on May 28, according to Customer Experience Dive.

Watterson said that Southwest has made efforts to combat this decline.

“There has been an ongoing effort to optimize the product descriptions and the basic economy booking flow, which initially included barriers to booking basic economy that resulted in reductions in overall website conversion,” Watterson said last week.

While many customers quickly expressed their displeasure at the decision to end free bags and it does not seem to have made the financial impact the airline would have hoped, Southwest Airlines CEO Bob Jordan has consistently defended the move.

"I know that we have some that are not happy - and we have many, many, many that are happy," he said last month. "You have to keep talking because sometimes people don't understand what you're doing. What I find is that once folks know where we're headed, they're very excited. I think you just have to play through this period of change because change is hard." 

Despite the outrage, it sounds like Southwest is committed to charging for checked bags.