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Southwest Airlines seeks more revenue, but rules out bag fees

Southwest Airlines
Baggage carts are towed to a Southwest Airlines jet at Bill and Hillary Clinton National Airport in Little Rock, Ark. The CEO of the airline said he will not consider charging a bag fee to raise revenues.
(Danny Johnston / Associated Press)

Bags will continue to fly free at Southwest Airlines. For now.

Under pressure to generate more revenues, the chief executive of the Dallas-based carrier rejected suggestions that the airline start charging customers to check luggage, even though bag fees have generated billions of dollars for other airlines.

The nation’s top 13 airlines collected $3.8 billion in bag fees during 2015, plus another $3 billion in charges paid by passengers who change or cancel reservations, according to the U.S. Department of Transportation

Southwest is the only major airline in the United States that doesn’t charge passengers to check their first two bags or to change flight reservations.

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During a quarterly earnings conference call with analysts this week, Southwest Chief Executive Gary Kelly said he won’t consider instituting such fees, as some industry analysts have urged.

“We have a unique and beloved position in the industry with this approach and we would be foolish to squander it, so no thought whatsoever on charging bags,” Kelly said.

Southwest’s net income declined to $388 million in the three months ended Sept. 30, compared to $584 million in the year-earlier period. Kelly blamed part of the decline on a technology outage in July.

Kelly said the airline is considering other money-making ideas. When asked to elaborate, he declined.

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“Well, it’s just not ready for prime time,” he said of his plan. “And I’d rather not share with our competitors where we see opportunities for a variety of reasons.”

hugo.martin@latimes.com

To read more about the travel and tourism industries, follow @hugomartin on Twitter.

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