Major Carriers Shift to Charging for Checked Baggage
What happened
Southwest Airlines officially eliminated its 'bags fly free' policy last May and began charging for checked baggage. This change was part of a broader transformation aimed at boosting profits and competing with carriers like Delta and United. While the announcement initially faced pushback, a Southwest executive noted that customers seemed to be embracing the company's changes.
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Why it matters
The policy shift impacts the competitive structure of the commercial air travel market. By introducing fees for checked bags, Southwest is altering its business model and increasing competitive pressure on the pricing and revenue streams of Delta Air Lines and United Airlines Holdings.
Major airlines, including Delta, Southwest, and United, compete in the commercial air travel market while manufacturer backlogs affect capacity.
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Who's involved
- Delta Air LinesDirect competitor in the commercial air travel market
- Southwest AirlinesInitiated the policy shift to charge for checked baggage
- United Airlines HoldingsDirect competitor in the commercial air travel market
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Delta Air LinesSpeculative
Delta Air Lines might face competitive pressure from Southwest Airlines' pricing shift.
- United Airlines HoldingsSpeculative
United Airlines Holdings could face increased competitive pressure on pricing and revenue from Southwest's new model.
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The entities involved
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Delta Air Lines
airline in the United States (1929–present)
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Southwest Airlines
airline of the United States
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United Airlines Holdings
American company