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Southwest Airlines to begin charging for third checked bag

January 05, 2008|From Bloomberg

Southwest Airlines Co., seeking to increase revenue without boosting fares, will begin charging customers who want to check more than two pieces of luggage.

Southwest now allows three checked pieces per passenger, with size and weight limitations for each bag. Starting Jan. 29, a third checked bag will carry a $25 fee, with higher charges for additional pieces, according to the airline's website.

The shift will help free luggage-hold space to carry more cargo -- an area the largest low-fare carrier is targeting to raise revenue, spokesman Chris Mainz said. The fees themselves probably won't generate much revenue, he said, without being specific.

"This will affect less than 2% of our customers," Mainz said. "In that sense, it's really not going to be a major impact to the customers."

AMR Corp.'s American Airlines, UAL Corp.'s United Airlines, Delta Air Lines Inc., Continental Airlines Inc., Northwest Airlines Corp., US Airways Group Inc. and JetBlue Airways Corp. allow two free checked bags for coach passengers. (EasyJet, Europe's second-biggest discount airline, said Thursday that it would continue to allow passengers at British airports to carry only one piece of hand baggage even as the government lifts the restriction at some terminals.)

Last month, Southwest pared its 2008 growth plans for a third time on concern that a slowing economy would hurt travel demand. The carrier is limiting capacity growth to 4% to 5%, down from 7.5% in 2007.

The airline also has changed its boarding procedures, airport gate areas and website to appeal to more business travelers, who generally pay higher fares.

Southwest shares fell 18 cents to $11.42. The shares have declined 28% in the last year.

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