Southwest Airlines has recently taken a proactive approach to understanding customer sentiment regarding the potential implementation of fees for checked bags. The airline, which currently does not charge for checked bags, conducted a survey to gauge how customers would feel about such a policy change. This survey included questions about various scenarios, such as offering different fare classes with different baggage allowances.
Southwest Airlines confirmed that the survey is part of their due diligence process to assess customer sentiment accurately. While there are currently no plans to change the policy of two free checked bags, the airline recognizes the importance of understanding what customers value the most. By tracking stakeholder sentiment on different aspects of their business model, Southwest aims to remain competitive and aligned with customer preferences.
In an effort to boost profit margins, Southwest Airlines has announced plans to introduce assigned seating next year, replacing its open-seating policy. Additionally, the airline is planning to offer extra-legroom seats as an added revenue stream. Despite these changes, CEO Bob Jordan reiterated that checked bags will continue to be included in the fare. This decision is based on the fact that “bags fly free” is a key reason why customers choose Southwest over other airlines.
Southwest Airlines and its board are currently facing pressure from Elliott Investment Management, an activist investment firm that holds an 11% stake in the airline. Elliott has expressed dissatisfaction with the airline’s business model and the perceived lack of innovation. The investment firm has even gone as far as nominating 10 new board members as part of a proxy battle and calling for the ouster of CEO Bob Jordan.
Southwest Airlines is at a crossroads where it must balance its longstanding commitment to customer service, such as free checked bags, with the need for innovation and revenue generation. While the airline has made some recent changes to its business model, it remains committed to listening to customer feedback and ensuring that any future decisions align with customer preferences. Ultimately, the ability to strike the right balance between tradition and innovation will be crucial for Southwest’s long-term success in the competitive airline industry.
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