Southwest Airlines (LUV) To Add Large Fees In 2013, Cut Jobs

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Southwest Airlines (LUV) To Add Large Fees In 2013, Cut Jobs

Southwest Airlines Co. (NYSE:LUV) has announced that it tends to add new fees next year in an attempt to increase revenue. The airline has popularized its free baggage policy, and the new fees it will implement include increased fees for overweight bags and third bags, higher fees for fare on AirTran, and other fees associated with the purchase of premium or open boarding at its gates. Southwest Airlines Co. (NYSE:LUV) is also adding a fee for restricted ticket holders who don’t cancel their seat or show up to board the flight.

Southwest Airlines Co. (NYSE:LUV) said the new fees should raise $300 million in revenue next year. The fees and some other changes the airline is making to improve its operations are expected to increase its revenue by $1.1 billion overall.

The airline’s CEO didn’t say that they won’t be adding more fees in the future, although he did say they aren’t planning a fee for a passenger’s first bag or a fee to make changes to flights prior to departure. At this point Southwest is still maintaining its no fee policy for up to two bags. Also, the airline plans to eliminate 300 jobs next year be not filling open positions.

So far Southwest is the only major carrier in the U.S. that has not gone through bankruptcy to reorganize. The airline industry as a whole has been struggling, and airlines that have restructured have made competition difficult for Southwest. The addition of these new fees pushes Southwest closer to other airlines which do have numerous fees.

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