Southwest Airlines Shakes Up Its Business Model for 2025 – Bag Fees, Assigned Seats, and More, What’s Behind the Airline’s Bold Move

Published on December 24, 2025

Southwest Airlines, once revered for its budget-friendly, egalitarian approach to flying, is undergoing a profound transformation in 2025. The airline, long known for its open seating, free checked bags, and a casual in-flight experience, has embraced industry standards that have significantly changed its image. Under the leadership of CEO Bob Jordan, Southwest has introduced bag fees, assigned seating, and the option for passengers to purchase extra-legroom seats. This move marks a seismic shift in how the airline operates and signals even more changes to come, including the potential introduction of airport lounges, long-haul international flights, and premium seating.

For years, Southwest’s business model set it apart from competitors in the U.S. airline industry. The airline’s policy of not charging for checked bags, combined with open seating and affordable fares, made it a popular choice for budget-conscious travelers. But as the competitive landscape evolved, Southwest found itself in a position where it needed to adapt to new industry trends to remain relevant.

The Big Shift: Why Southwest is Changing Its Long-Standing Policies

Historically, Southwest Airlines was the airline of the “people,” focusing on simplicity, transparency, and low-cost flying. Passengers could easily book a ticket without worrying about add-on fees for things like checked luggage or seat selection. The airline’s policy of not assigning seats was part of its charm, allowing passengers to board in any order and choose an available seat.

However, in 2025, the airline has reversed some of these long-held traditions. Now, passengers will have to pay for checked bags, and seats will be assigned at the time of booking. This marks a sharp departure from the airline’s previous stance, which relied heavily on free services to attract customers. Additionally, Southwest has introduced extra-legroom seats, which passengers can purchase for an added cost. These changes, which mirror practices already adopted by competitors like American Airlines and Delta, are designed to streamline operations and provide passengers with more choices, but they have been met with mixed reactions.

CEO Bob Jordan, speaking about the transformation, emphasized that the airline is on track with its new strategy. He expressed confidence in the company’s approach, stating that the changes align with their expectations for growth and innovation. However, not all customers are thrilled about the added fees and changes to Southwest’s iconic brand.

Challenges and Reception: Mixed Reactions to Southwest’s New Model

The reception to Southwest’s overhaul has been mixed. For some passengers, the introduction of bag fees and assigned seating has been a difficult adjustment, particularly for those who have long enjoyed the airline’s no-frills, straightforward approach. Many frequent travelers, used to the free checked bags and the flexibility of choosing their seats, have expressed dissatisfaction with the new charges.

On the other hand, some customers see these changes as a natural progression for Southwest, allowing the airline to remain competitive in a crowded market. With airfares rising across the industry and airlines increasingly relying on ancillary revenue from seat upgrades and add-ons, Southwest’s move to charge for checked bags and offer premium seating options is not entirely unexpected. Industry analysts suggest that the airline may be trying to position itself more like its competitors, focusing on creating new revenue streams while still maintaining its reputation for low-cost flying.

The airline’s decision to embrace these changes reflects broader trends within the aviation industry. U.S. carriers, particularly the legacy airlines, have shifted toward a more segmented service model, where passengers can choose from various seating options, including premium seats, in exchange for higher fees. By implementing these industry-standard practices, Southwest aims to maintain profitability while still offering competitive fares.

What’s Next for Southwest: Lounges, Long-Haul Flights, and Premium Services

Looking ahead, CEO Bob Jordan revealed that Southwest’s transformation is just beginning. The airline is exploring the possibility of introducing airport lounges, long-haul international flights, and even more premium seating options. If these plans come to fruition, Southwest will be venturing into new territory, competing with full-service carriers for high-end travelers and international passengers.

The potential launch of long-haul international flights is particularly significant. Southwest has long focused on domestic routes, but expanding into international markets could open up new opportunities for growth. These flights would likely be a major step for the airline, allowing it to tap into a more affluent customer base willing to pay for additional amenities and services.

Additionally, the concept of lounges for premium passengers would offer a more refined airport experience, a far cry from Southwest’s humble beginnings of offering a no-frills, utilitarian service. These new services would position Southwest more like traditional full-service airlines, catering to a broader spectrum of travelers, including business-class passengers.

The Future of Southwest Airlines: Navigating a Changing Landscape

As Southwest Airlines continues to evolve in 2025 and beyond, it faces the challenge of balancing its legacy as a low-cost carrier with the demands of a changing market. While some longtime customers may miss the airline’s simpler approach, the company is betting that its new offerings will attract a wider range of travelers, including those seeking premium services and long-haul international flights.

For passengers, the key takeaway is that Southwest’s iconic service model is no longer what it once was. The days of free checked bags, open seating, and an egalitarian approach to flying may be over. However, the airline’s new offerings, such as premium seating and lounges, could provide a more comfortable and flexible travel experience for those willing to pay for the upgrade.

As Southwest Airlines continues to innovate and adapt to the evolving aviation industry, travelers will need to stay informed about the latest changes. For some, the new Southwest may be a welcome improvement, while for others, it may signal the loss of the airline’s original charm.