Southwest Airlines has delayed some of its proposed changes, and has reassure customers that bags will still fly free.
Transcript:
Conway Gittens: Hereâs what weâre watching on TheStreet today.
Fresh data released Friday seemed to support the Federal Reserveâs September rate cut. The Personal Consumption Expenditures Index showed inflation rose 2.2 percent in August compared to a year ago, down from 2.5 percent in July. That move brought the Fedâs preferred inflation measure even closer to its 2 percent target.
In other headlines – thereâs good news for people considering a flight on Southwest Airlines. The company confirms that it will not start charging baggage fees. Right now, the airline lets passengers check-in two bags at no cost, while most airlines charge at least $35 for the first bag. In just the first six months of 2024, airlines collected $3.7 billion in checked bag fees, according to the Bureau of Transportation Statistics.
Southwest âbelieves any change in the current policy..would drive down demand and far outweigh any revenue gains created by imposing and collecting bag fees.â
The airline is also betting that by keeping its âbags fly freeâ policy, fewer passengers will bring bags on the plane, which makes plane boarding smoother and faster.
That last point is important since Southwest also announced a delay in getting rid of open seating. The airline said assigned seating will not officially kick-in until 2026, with ticket purchases beginning in late 2025. Southwest admits 80 percent of its customers and 86 percent of the flying public prefer assigned seats.
One of the reasons for the delay has to do with Southwestâs other plan to introduce premium seating, which means plans have to be reconfigured – and that takes time.
Southwestâs management is under pressure to shake things up after a drop in revenue.
Thatâll do it for your Daily Briefing. From the New York Stock Exchange, Iâm Conway Gittens with TheStreet.
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