Tag Archives: airlines

Big Changes at Southwest Airlines

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Southwest Airlines is changing its long-standing business model in an effort to increase annual earnings by more than $4 billion by 2026. The company confirmed it will roll back several hallmark policies as part of a broader financial strategy.

One of the biggest changes is the end of the airline’s “Bags Fly Free” policy. Most passengers will now pay standard baggage fees, a move the company estimates will generate roughly $800 million in additional revenue.

Southwest’s open seating system will also be changing. Beginning with bookings in late 2025, the airline will shift to assigned seating, including premium options. Full implementation is expected in early 2026. According to the company, internal research found that 85% of non-Southwest customers cited open seating as a reason for avoiding the airline.

The airline is also revising its fare categories and altering flight credit policies. New credits issued going forward will come with expiration dates, ending the previous practice of indefinite validity.

Additional efforts to diversify revenue include exploring premium lounge offerings and expanding international service—both aimed at attracting business travelers.

These changes are the airline’s most significant operational overhaul in decades. The shift to assigned seating alone is projected to bring in $1.5 billion annually, largely by appealing to higher-paying customers and improving pricing flexibility.

Travelers Face Soaring Airfares

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With the shining sun and Covid restrictions letting up, Americans are eagerly booking vacations and flights for the upcoming summer months. Tired of regulations and staying at home, people are excited for a newfound freedom they’ve missed. Together with the enthusiasm to travel, experts warn of increasingly hefty airfares.

According to the Associated Press, the expected number of travelers this summer is higher than in pre-pandemic times. Prices of domestic flights are selling at rates 24% higher than during this season in 2019 and 45% more than this time last year. Similarly, international flights are going for 10% more than in 2019.

So, why the drastic increase?

According to airlines, there are a few factors. First and foremost is the rise in jet fuel prices. Additionally, there are fewer flights available for booking and many travelers interested in purchasing tickets. In the words of Hayley Berg, an economist for Hopper, “We have more travelers looking to book fewer seats, and each of those seats is going to be more expensive for airlines to fly this summer because of jet fuel.” Lastly, there is a major decrease in staff numbers in comparison to before the pandemic, and this often results in canceled flights.

Bottom line: If you are eager to make up for missed time during the Covid-19 restrictions, go for it – but be prepared to pay the price!