Southwest Airlines is making significant changes to its business model, including charging for checked bags, introducing a basic economy fare, and moving away from its open seating policy. The airline estimates a potential revenue increase of $1.5 billion from bag fees but anticipates a $1.8 billion loss in market share. Starting May 28, travelers will pay to check bags unless they have a Business Select ticket or are top-tier frequent flyer members. A-List Preferred members and Southwest credit card holders get two and one free checked bags, respectively. The new basic economy fare does not allow free changes, same-day standby, and has a six-month expiration on flight credits. These changes come after pressure from Elliott Investment Management to improve returns.
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