{"id":1471008,"date":"2024-06-12T17:40:00","date_gmt":"2024-06-12T21:40:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1471008"},"modified":"2024-06-12T17:40:00","modified_gmt":"2024-06-12T21:40:00","slug":"elliott-management-may-force-southwest-to-abandon-bags-fly-free-policy","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/elliott-management-may-force-southwest-to-abandon-bags-fly-free-policy\/1471008\/","title":{"rendered":"Elliott Management May Force Southwest To Abandon ‘Bags Fly Free’ Policy"},"content":{"rendered":"

Elliott Management May Force Southwest To Abandon ‘Bags Fly Free’ Policy<\/span><\/p>\n

\n

With\u00a0activist hedge fund\u00a0Elliott Management<\/a> in the pilot’s seat at\u00a0Southwest Airlines, the budget airline’s popular “bags fly free” policy is under\u00a0scrutiny.<\/p>\n

If\u00a0Paul Singer gets his way, the airline’s popular “bags fly free” policy could end. This policy is a huge\u00a0value proposition for customers when choosing a carrier to fly across the US.\u00a0<\/p>\n

According to Bloomberg<\/a>…\u00a0<\/p>\n

“<\/em>Elliott appears to have a different view, noting in a website presentation that Southwest has “written off” revenue opportunities implemented across the industry over the past 15 years, including assigned seating, premium products, a bare bones basic economy fare and checked bag fees<\/em><\/strong>.”\u00a0<\/em><\/p>\n

Southwest’s policy clearly stated on its website:\u00a0“Each Customer is allowed two free checked bags.”\u00a0<\/em><\/p>\n

<\/a><\/em><\/p>\n

Elliott is right to consider scrapping the policy to boost additional revenue for the struggling carrier, which recently withdrew its 2024 fiscal outlook due to delays in Boeing jet deliveries.<\/p>\n

According to the US Transportation Department, in 2023, the airline only collected $73 million in checked bag fees, while American Airlines took in $1.4 billion. Spirit Airlines collected $988 million, and Frontier Group collected about $880 million.\u00a0<\/p>\n

Data from\u00a0IdeaWorks and CarTrawler show that airlines globally collected $33.3 billion in\u00a0baggage fees last year, up nearly 15% from 2023.\u00a0<\/p>\n

President of IdeaWorks, Jay Sorensen said if Southwest were to drop its\u00a0“bags fly free” policy because of pressure from Elliot, that could trigger an exodus from\u00a0loyal customers.\u00a0<\/p>\n

Sorensen said such a change could be “traumatic” to the airline’s customers, culture, and employees.<\/p>\n

Conor Cunningham, a Melius Research analyst, said the policy is “so\u00a0ingrained in the culture” that he “can’t imagine that they’d give up on it.”\u00a0<\/p>\n

Southwest’s “value proposition and something customers know they are getting when they travel with us,”\u00a0Cunningham said.\u00a0<\/p>\n

Henry Harteveldt, a travel industry analyst and founder of Atmosphere Research Group, said,\u00a0“I don’t think Southwest can dismiss not charging for bags anymore, not when you have an activist investor sitting on $1.9 billion of your stock.”\u00a0<\/p>\n

In markets year-to-date, Southwest shares have broadly underperformed the S&P airline index.\u00a0<\/p>\n

<\/a><\/p>\n

“There are going to be decisions that Elliott may force on the airline, with Southwest holding its nose. You cannot ignore that shareholder,”\u00a0Harteveldt concluded.\u00a0<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nWed, 06\/12\/2024 – 13:40<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/elliot-management-may-force-southwest-abandon-bags-fly-free-policy<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Elliott Management May Force Southwest To Abandon ‘Bags Fly Free’ Policy With\u00a0activist hedge fund\u00a0Elliott Management in the pilot’s seat at\u00a0Southwest Airlines, the budget airline’s popular…<\/p>\n","protected":false},"author":0,"featured_media":1471009,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1471008","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-6aFW","jetpack_featured_media_url":"https:\/\/bugaluu.com\/news\/wp-content\/uploads\/sites\/3\/2024\/06\/2024-06-12_07-41-25-zC28UG.png","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1471008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1471008"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1471008\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media\/1471009"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1471008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1471008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1471008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}