Every time I fly on Southwest Airlines, I understand what my friend, Charlie Leocha says about the most profitable carrier in the US. “They’re winning over hundreds of new customers every day, because they aren’t charging the baggage fees that the other guys are…it’s making them more money in good will than United or American are making in extra revenue.”
Now that may be a bit of a stretch, but if you’ve flown in the past year you know the drill. You’re usually on a regional jet, a narrow airplane with smaller than usual overhead bins. You get in the plane, unlucky that you’re boarding close to last, and there’s no more room up in the overhead. So you have to give your carry-on suitcase to the flight attendant to check, even though you didn’t want to check it to save that $15 or $25 fee. So you don’t pay the fee but have to schlep the bag back through the plane in front of everyone after the embarrassing experience of not being able to fit it in that tiny overhead.
Contrast this with Southwest…they don’t even charge you for the second bag you check, so of course, their overhead bins aren’t crammed full. Plus they don’t fly needle-thin regional jets, they only fly Boeing 737s, so there is always enough room.
Can Southwest capitalize on not charging fees and gain enough new passengers to make it worth it to them? They do have a point; better to charge for upgraded services like business class seating than for things people once took for granted like shipping luggage.