Southwest Airlines is ending its free checked bags policy due to financial pressures and the need to boost revenue. The airline has faced challenges, including recent layoffs and competition from other carriers, and is under pressure from an activist investor to improve profitability.

Rapid Rewards A-List Preferred members and passengers who book Business Select fares will continue to receive two free checked bags. A-List members, Southwest-branded credit card holders, and other select customers will be allowed one free checked bag.

Southwest Airlines is introducing a basic economy fare category, revising its Rapid Rewards program, and offering assigned seating and extra legroom options. The airline is also adapting its operations to handle the expected increase in carry-on luggage.

The changes could negatively impact customer loyalty and brand perception, as they alter key policies that have historically differentiated Southwest from other airlines. Experts warn that these changes might lead to a loss of customer preference and loyalty.