Barron's Streetwise Southwest Airlines Turnaround Comes With Baggage
Apr 4, 2025
Connor Cunningham, an airline analyst at Melius Research, dives into the recent shifts at Southwest Airlines. He discusses the airline’s controversial move to introduce baggage fees, signaling a significant strategic change. The conversation also touches on tariff impacts and their broader implications for the U.S. economy. Additionally, Cunningham highlights the challenges Southwest faces in the post-COVID landscape and the competitive pressures from rivals like Delta and United, urging the airline to adapt its services to maintain relevance.
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Southwest's Identity Crisis
- Southwest, once known as the fun, casual airline, has undergone significant changes, disappointing loyalists like Alexis.
- These changes include the introduction of baggage fees and assigned seating, making them more like other airlines.
Experiences with Spirit Airlines
- Alexis recalls a flight on Spirit Airlines where she experienced excessive thirst, suggesting high prices for beverages.
- Jack recounts considering Spirit for a family trip due to low fares, despite concerns about comfort and added fees.
Post-COVID Challenges
- The post-COVID environment presented new challenges for Southwest, impacting staffing and operational efficiency.
- Pilot retirements, TSA agent shortages, and air traffic controller reductions created a difficult landscape.