Southwest Airlines has altered its long-standing 'two bags fly free' policy, now charging for most checked bags except for high-status customers and Rapid Rewards credit card holders. This significant shift seems aimed at increasing credit card memberships by offering a complimentary checked bag as a perk, despite an annual fee. In 2024, the loyalty program generated approximately $2.2 billion, comprising 8% of the airline's revenue. As costs rise and travel demand fluctuates, this strategy could help Southwest sustain its revenues amidst growing competition.
Southwest Airlines' recent shift away from its 'two bags fly free' policy aims to increase credit card sign-ups by offering selected travelers a complimentary checked bag.
With the hope of boosting loyalty revenue, Southwest is strategically leveraging its credit card program as a new method to attract customers while navigating rising operational costs.
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