WASHINGTON — Southwest Airlines announced Tuesday that it would discontinue its free checked bags program for many customers, a major draw to the budget airline used by millions of Americans. 

Under the airline’s current “Bags Fly Free” policy, each passenger is allowed to check two bags for free. 

But in Tuesday’s announcement, Southwest President and CEO Bob Jordan said most fliers would not receive that benefit on flights booked on or after May 28, 2025. 

Southwest officials did not indicate how much each checked bag would cost, but other airlines typically charge anywhere from $35-$50 per bag. 

Southwest said it would still offer two free checked bags to its Rapid Rewards A-List Preferred Members, and to customers who bought Business Select tickets. They will also offer one free bag to A-List Members and other select customers, and will credit one checked bag for those with the airline’s credit card. 

Southwest is also rolling out a few other changes including offering a “Basic” fare option, officials said. Southwest has also rolled out redeye flights — which began in February. 

As recently as Southwest’s investor day in late September, airline executives described the bags-fly-free as the most important feature in setting Southwest apart from rivals. All other leading U.S. airlines charge for checked luggage, and Wall Street has long argued that Southwest was leaving money behind.

Southwest has struggled recently and is under pressure from activist investors to boost profits and revenue. The airline reached a truce in October with hedge fund Elliott Investment Management to avoid a proxy fight, but Elliott won several seats on the Southwest board.

The airline announced last month that it was eliminating 1,750 jobs, or 15% of its corporate workforce, in the first major layoffs in the company’s 53-year history.

Other airlines, such as United or Delta, have long charged fees per checked bag. But Southwest is often considered a more budget-friendly airline because of its bag policy and open-seating arrangement. 

But even that arrangement is changing soon. 

Last year, Southwest announced it would end its longstanding practice of open seating, which began when the company was founded in 1967, and switching to assigned seating — similarly to other U.S. airlines. 

Assigned seating is expected to begin rolling out in the second half of 2025 and open seating is expected to end sometime in early 2026. 

“We have tremendous opportunity to meet current and future customer needs, attract new customer segments we don’t compete for today, and return to the levels of profitability that both we and our shareholders expect,” CEO Bob Jordan said in a statement. 

And shareholders appeared to appreciate the news. Shares of Southwest Airlines jumped 7.3% in premarket valuation Tuesday morning after the news broke about the discontinued bag program.