Southwest Airlines’ recent announcement could indicate that the airline’s cheapest fares, now known as ‘Wanna Get Away,’ could be replaced with the base ‘Basic’ fare branding following the airline’s latest passenger experience changes.
Replacing with Basic
On March 11, when Southwest Airlines announced significant changes to its fare types and the benefits they offer, the airline also said that starting May 28, it would introduce a new, ‘Basic’ fare type on its lowest-priced tickets purchased after that day.
In a graphic attached to the announcement, the airline detailed the product updates that will be valid as of May 28, which includes the surprising changes to its checked bag policies.
Fare types were split into four, ranging from the most expensive ‘Business Select,’ ‘Anytime,’ Wanna Get Away Plus,’ to the cheapest ‘Basic’ tickets.
The airline’s present-day fares page shows four fare types, with ‘Wanna Get Away’ still being shown on the site. Southwest Airlines described it as its ‘base fare.’
Changes and rewarding its most loyal customers
Still, the most crucial change announced on March 11 was that Southwest Airlines will eliminate ‘Bags Fly Free,’ or the ability for all passengers to bring two checked bags, starting on May 28.
Going forward, the airline will offer two free checked bags to Rapid Rewards A-list Preferred Members and passengers who purchased ‘Business Select’ tickets. One free checked bag will be offered to A-List Members, “other select Customers,” and Rapid Rewards Credit Card owners.
“Customers who do not qualify for these free bag options will be charged for their first and second checked bags (weight and size limitations apply).”
Southwest Airlines argued that its decision to eliminate checked bags for all passengers and reduce the amount of Rapid Rewards points awarded to ‘Wanna Get Away Plus’ and ‘Wanna Get Away’ travelers was to deepen and reward the loyalty of its most engaged customers.
In addition, the airline hopes to attract passengers who value fare above everything else, removing its competitive advantage versus ultra-low-cost carriers and full-service airlines offering a basic economy product.
While it remains to be seen whether the changes will result in favorable financial results – the airline said that the “initiatives […] support business objectives” and create choice for customers – they have attracted the attention of its competitors.
On March 18, Frontier Airlines issued a statement to promote its campaign to offer free checked bags for flights departing between May 28 and August 18. The announcement read:
“Some airlines have changed. They’ve raised fees, taken away perks, and made travel feel like a one-sided relationship. If your airline is treating you like an afterthought, maybe it’s time to file for divorce. Frontier is here for the rebound – offering a fresh start with an unbeatable deal.”
The puns and cheeky jabs continued throughout the statement, including Barry Biffle, the Chief Executive Officer (CEO) of Frontier Airlines, saying that the carrier always had heart and adding that some airlines are walking away from things that travelers love.
At the same time, Frontier Airlines is running towards them, with Biffle inviting potential customers to think about the promotion as the “ultimate ‘divorce your old airline’ deal.” According to the CEO, if travelers show the airline love, these perks could become permanent.
Known outcome
However, Southwest Airlines knew the changes to its checked bag policies would not only attract ridicule from competitors but would also be met negatively by passengers.
It seems like the activist investor Elliott Investment Management (Elliott), which pressured the airline to appoint five of its chosen board members in October 2024 to end the proxy war that began in June 2024, could have influenced the shift and other decisions, including the airline’s first-ever layoffs announced in February.
During the airline’s Investor Day in September, when its executives were still in the trenches ducking from the shots that had been fired by Elliott since June, Ryan Green, the Executive Vice President and Chief Transformation Officer (CTO) of Southwest Airlines, said that customers prefer ‘Wanna Get Away’ over basic economy due to two reasons.
“First, our bags fly free policy; and second, industry-leading flexibility that stems from not charging fees for ticket changes or cancelations.”
Elaborating on the ‘Bags Fly Free’ policy (illustrated with the sticker on the Boeing 737-700 shown below), Green shared that market research allowed the carrier to conclude that it was “far and away the top feature that differentiates Southwest from our competitors, and it is one of the top criteria in why customers choose Southwest Airlines.”
“[…] changing our bag policy would be value destructive. The results show too much defection in future flying, even in markets where we're strong, that more than offset the ancillary revenue we'd earn from bag fees.”
Green noted that if Southwest Airlines were to remove the bag policy, it would lose around $300 million of revenue, adding that it was good for shareholders, which, at that point and to this day, includes Elliott.
On February 19, Southwest Airlines issued a Securities and Exchange Commission (SEC) filing that said that Green informed the company of his decision to leave the airline on April 1.
