Southwest Airlines gets a lot of love for its Bags Fly Free Campaign. which enables travelers to check two bags for free.
Here's the Southwest marketing message: "While bag fees have become the norm amongst our competitors, we don’t believe in springing unpleasant surprises on our Customers. Staying true to our reputation as the maverick of the airline industry, this is just another way that we dare to be different."
But, actually the airline is more myth-maker than maverick in some respects because it is busy strategizing about optimal ways of attracting ancillary-services revenue in a host of other areas.
No, Southwest doesn't intend to begin charging for first- and second-checked bags, CEO Gary Kelly told financial analysts Oct. 15 in a third-quarter conference call.
The reason? Kelly believes the policy is "huge" and that Southwest is getting 2-3 percent of its customers because the airline doesn't levy a fee on the first two bags.
But, although the free pass for the first two bags gets a lot of the publicity, Southwest CFO Laura Kelly noted that the airline took in $10 million in revenue during the third quarter from a new pet fare, unaccompanied minor fee, and excess and overweight bag fees. (Just the excess and heavy bag fees account for about $40 million in revenue annually.)
And, the airline, which notched a $23 million profit when you exclude one-time charges during the quarter, attracted $2 million in revenue in September for its new EarlBird Check-in product, which was introduced last month.
Just like the other non-maverick airlines, Kelly sees "substantial ancillary revenue opportunities besides bag fees that we are continuing to pursue," adding that Southwest is particularly enthusiastic about the revenue opportunities inherent in a "next generation" frequent flyer program.
So on Southwest, bags [the first two, at least] fly fee-free, but unaccompanied minors don't.
Thus, just like its peers, Southwest is keen on charging passengers for services which formerly were free.
Airlines, including Southwest, are locked-in on this strategy because they believe charging fees for optional services will attract more revenue than the alternative of raising fares across the board and losing customers.
Maverick or no maverick, that's the state of the airlne industry these days.