Bag Fees May Boost Southwest Revenue—at the Cost of a Famous Slogan

A generation ago, the triple threat of the Sept. 11 terror attacks, the Great Recession and the “oil shock” that pushed crude prices to $147 a barrel sent airlines scrambling for new revenue sources.

Among the easiest was slapping fees onto checked bags. American Airlines was the first major carrier to introduce them in 2008, followed by United, Delta, Alaska, and JetBlue. And just like that, a freebie as reliable as a pillow and a bag of peanuts was free no longer.

Except on Southwest.

“With the customer top of mind, Southwest took a stand with the launch of ‘Bags Fly Free,’” recounts Southwest’s homepage. “Despite multiple financial crises, Southwest remained committed to customers and has repeatedly said ‘no’ to hidden fees as a way to succeed.”

But that ‘no’ has ended, as the baggage fees that Southwest first alluded to in March officially took effect May 27.

Market forces push brands into unpopular pricing decisions all the time, of course, but what makes this one different is that the free-bag policy was always more than a perk for Southwest. As one of the best-known advertising tag lines of the 2000s, “Bags Fly Free” is synonymous with Southwest, a cornerstone to its customer-friendly positioning.

And while extra fees will obviously generate the added revenue the airline desires, the bigger question is this: By grabbing for dollars at the possible expense of its brand image, is Southwest shooting itself in the foot?

“They may not be shooting themselves in the foot, but they’ve got to let go of the last reason to believe in the value proposition that worked for almost five decades and made them the most consistently profitable airline in the world,” veteran marketer Ian Baer, founder of agency Sooth, told ADWEEK.

As Baer sees it, nixing the free-bag policy is just the latest step in a gradual erosion of Southwest’s differentiation.

“It began four years ago with the quiet devaluation of frequent flier miles,” he said. “Then came the move to assigned seating and the creation of a business class section. And last year, they ended the policy of flight credits never expiring. If you’re asking what’s left to distinguish Southwest from any other major carrier, the unfortunate answer is: not much.”

What’s in a slogan?

Southwest’s slogan is riveted to its brand almost literally. A few years ago, Hamlin Transportation Consulting president George Hamlin noticed that the belly of one of Southwest’s 737s bore “Free Bags Fly Here” on an arrow pointing to the cargo hold. A nearby luggage truck sported a banner: “I carry free bags.”

“I flew on Southwest this past weekend and actually heard people commenting on [the baggage fees],” Hamlin added. “No one is pleased.”

As history has shown, it’s never a good look for a brand to retract a marketing mantra, be it age-old ones like Listerine’s claim to cure colds (it doesn’t) or, in recent years, Skechers declaring that its Shape-Ups athletic shoes would give wearers “buns of steel.” (The FTC found no evidence of steely buns.)

While the pledge of bags flying free was never an ironclad guarantee, its disappearance conjures the same specters as the examples above—that customers might feel misled and lose their loyalty. And that, Hamlin said, carries real consequences.

“This decision is not going to expand the universe of passengers,” he said. “You’re going to be dealing with the same number of people—there’s potentially a market-share shift.”

In fact, Southwest acknowledged that danger at its Investor Day event last September, when management revealed that even though baggage fees could generate as much as $1.5 billion in new revenue, they could simultaneously cost Southwest $1.8 billion in market share. In 2024, CEO Robert Jordan told analysts that “after fare and schedule, ‘bags fly free’ is cited as the No. 1 issue in terms of why customers choose Southwest.”

A Southwest spokesperson pointed out to ADWEEK that the new baggage fees are not comprehensive. The carrier’s Rapid Rewards A-List Preferred Members and Business Select customers will still get two free checked bags, while A-List Members get one.

Revenue aside, why would a seasoned carrier like Southwest willfully sacrifice such an effective branding and marketing feature? Well, Southwest itself probably isn’t. Private equity firm Elliot Investment Management, which has a contentious relationship with the airline, is reportedly pressuring the airline to “evolve”—which seems to mean charging the same fees that other carriers do. But if enough fliers defect, that tactic might change quickly.

“I would not be amazed if [these fees] actually produce the reverse effect,” Hamlin said. “I hope somebody would have the good sense to go back to what they were doing successfully before.”