Southwest Airlines increased the cost of its first checked bag from $35 to $45 and the second bag from $45 to $55, a $10 hike that takes effect on all reservations made on or after April 9, 2026.
The change marks the most substantial adjustment to Southwest’s baggage policy since the carrier introduced fees in May 2025, when it ended its long‑running “bags fly free” program. The new pricing structure is part of a broader strategy to diversify ancillary revenue streams, which now include assigned seating and extra‑legroom options.
Management explained that the fee increase is driven by rising fuel and operating costs, particularly after the airline discontinued its fuel‑hedging program in early 2025. “As part of an ongoing analysis of the business and against the evolving global backdrop, Southwest Airlines is increasing its fees on first and second checked bags by $10, effective on all reservations ticketed or voluntarily changed on or after April 9, 2026,” the company said.
The fee adjustment is expected to generate additional revenue that can help offset the higher fuel expense. In its Q4 2025 earnings release, Southwest reported an adjusted EPS of $0.58 versus analysts’ $0.56 estimate, and revenue of $7.44 billion, slightly below the $7.51 billion consensus. The company guided for 2026 adjusted EPS of at least $4.00, a significant upside from prior guidance, signaling confidence that ancillary revenue growth will support profitability.
Industry peers such as Delta and United have also raised baggage fees by similar amounts, reflecting a sector‑wide response to volatile jet‑fuel prices. Southwest’s move aligns its pricing with competitors while reinforcing its focus on ancillary revenue as a key driver of margin improvement.
"Our performance reflects the extraordinary work of our People, who transformed the business while continuing to serve our Customers with unparalleled hospitality and operational excellence. Their efforts enabled us to achieve $574 million in full‑year adjusted EBIT, and earned Southwest the top spot in The Wall Street Journal Best U.S. Airlines of 2025. I could not be more proud of what we accomplished," said Bob Jordan, Southwest’s President & Chief Executive Officer. "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," he added.
The fee increase, while modest from a customer perspective, is a deliberate move to strengthen Southwest’s financial position amid rising operating costs. By capturing additional ancillary revenue, the airline aims to sustain its profitability trajectory and support its broader transformation strategy.
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