Is Bob Chapek Running Southwest Airlines?!
Umbrella Bob strikes back! In a move that can best be described as “Chapekian,” the Walt Disney World fan-favorite airline is changing everything that made Southwest, Southwest. This article details the huge changes to the budget carrier that will fundamentally alter allegiances with family travelers for decades to come.
To be clear, the title is sarcasm. Questioning whether Bob Chapek had suddenly been promoted to CEO of Southwest Airlines is what first crossed my mind when hearing this news. I also may or may not have looked up SWA’s Board of Directors to see if ole Bobby Boy had snuck into a high-level leadership position. Chapek is unaffiliated with Southwest Airlines…for now. Perhaps he’s waiting for a call from Spirit. That does seem more his speed.
As it turns out, Southwest Airline’s CEO is Bob Jordan, who also serves as President and Vice Chairman of the Board of Directors. Bob is a 36-year Southwest veteran, who has held 15 different positions in the company. Bob Jordan, as with Bob Chapek before him, proves that decades-long veterans of a company can somehow manage to misunderstand the foundation of fandoms and brand loyalty. At minimum, both demonstrate a lack of concern about alienating the people who make up the respective companies’ core customers and risking what leaders before them built-up over decades. Must be a “Bob Thing.”
Here’s a rundown of the changes according to Southwest Airlines, which obviously is trying to spin these in the best light possible:
- Southwest will continue to offer two free checked bags to Rapid Rewards A-List Preferred Members and customers traveling on Business Select fares, and one free checked bag to A-List Members and other select customers. Southwest will credit one checked bag for Rapid Rewards Credit Cardmembers.
- Southwest customers who do not qualify for these free bag options will be charged for their first and second checked bags, with weight and size limitations applying. (Emphasis added.) Changes will apply to flights booked on or after May 28, 2025.
- The carrier recently adjusted the number of Rapid Rewards points customers earn on qualifying flights. Customers now earn more points on Business Select fares while earning less on Wanna Get Away and Wanna Get Away Plus fares. (Emphasis added.)
- Southwest Rapid Rewards, the carrier’s loyalty program, will also introduce variable redemption rates across higher-demand and lower-demand flights.
- These strategic moves, aimed to deepen and reward loyalty between Southwest and its most engaged customers, create new opportunities to reach consumers who value fare above everything else. To align with these changes, Southwest will introduce a new, Basic fare on our lowest priced tickets purchased on or after May 28, 2025, in advance of offering assigned seating and extra legroom options.
- Southwest continues to widen its distribution channels to reach new customers, with flights and fare products now available to book through online travel agency Expedia, beginning last month.
- Flight credits issued for tickets purchased on or after May 28, 2025 will expire one year or earlier from the date of ticketing, depending on the fare type purchased.
In a nutshell, Southwest is ending its “bags fly free” program and charging all but business travelers and high-status customers for checked bags. Southwest is also reducing the points most customers earn on flights on the one hand, and devaluing its points upon redemption on the other hand.
Southwest is also introducing a basic economy fare that could, in theory, be cheaper than its current fares. Equally likely, it will result in nickel & diming a la Frontier and Spirit that hits consumers with hidden fees and upcharges after the lower upfront booking. These changes come ahead of the rollout of assigned seating and premium legroom categories, which were previously announced.
Southwest Airline’s changes come after months of pressure from activist investor Elliott Management. The firm took a stake in the airline last year and won five board seats as it pushed for major changes at the company, which clung to perks like free checked bags, no change fees, and open seating.
“Two bags fly free” is a registered trademark of Southwest Airlines. Its about-face on what executives long cast as a sacrosanct passenger perk comes as something of a surprise. United’s CEO likened Southwest ending its flyer-friendly baggage policies to the “slaying of a sacred cow.”
At the same time, it’s not surprising that investors would want a slice of that “fee pie.” Other airlines generated more than $5 billion from bag fees last year, according to federal data.
Southwest executives have long said they would not charge for bags, telling Wall Street it’s a major reason why customers chose the airline. (Like Costco and cheap hot dogs!) Just last fall, Southwest doubled-down on this position at its investor day, stating it had down rigorous research that such a policy would cost the company $300 million.
Although Southwest said that it would gain between $1 billion and $1.5 billion from charging for bags, the company indicated it would lose $1.8 billion of market share over time. Southwest said at the time that its ‘bags fly free’ policy generates market share gains in excess of potential lost revenue from baggage fees.
In “fairness,” Southwest’s stock was up 8% on the day (an otherwise down one for the broader markets) after announcing these changes. That suggests Wall Street strongly endorses the moves as being good for business. Of course, it’s fair to point out that what’s good for investors in the short term is often at odds with what’s good for companies in the long term.
This is especially true for companies that have spent decades building up fan loyalty and brand goodwill. We’ve had an article or two ’round these parts about the dangers of chasing quarterly results at the expense of inflicting reputational damage. (I’m not a fan of this approach, to put it mildly.)
Turning to commentary, the title wasn’t a joke. Well, it was to the extent that I didn’t actually believe Bob Chapek had secretly become CEO of Southwest Airlines. But I’m completely sincere that this strikes me as a very Chapekian move, analogous to what happened to Walt Disney World a few years ago. Bob Chapek is not running Southwest, but it’s the same type of short-term gains mentality that’s ruining Southwest.
In both cases, those calling the shots seem to fundamentally misunderstand the appeal of their products. In Southwest’s case, the company has revealed a dramatic turnaround plan, that (spoiler alert) mostly copies the business plans of legacy carriers like Delta, United, and American.
During presentation to investors late last year, Southwest Airlines executives laid out plans for assigned seating, extra-legroom seats for purchase, a redesigned cabin, and other behind-the-scenes initiatives designed to increase revenue and turn around an underperforming stock price.
Fast-forward to today, and Southwest is ditching its unique playbook of more than 50 years that had developed it a loyal fan following in favor of an airline that largely resembles most of its peers. Now, Southwest is dropping its famous “bags fly free” slogan as part of a massive push for the carrier to end long-standing customer perks and policies. Sound familiar?
It’s not that much different than Walt Disney World making a variety of business decisions and justifying them on the basis of what’s “standard industry practice.” Both companies have seemingly forgotten what makes them standouts in their respective travel classes, voluntarily ditching their distinct advantages to be more like everyone else. Unicorns who’d rather be among a herd of horses.
We’ve often pointed out that despite Walt Disney World being a resort business that also operates theme parks, Disney actually is not that good of a hotelier. We’ve further argued that it made little sense for Disney to chase Marriott, Hilton, and Hyatt–that Disney is better off differentiating itself and competing on its own terms (themed design, perks, etc.)–that Disney cannot compete on the terms of real world hotel brands.
This is because even most mid-tier chained-brand hotels handily beat Disney on operations. When it comes to the luxury properties (JW Marriott, Park Hyatt, Conrad, etc), there’s absolutely no competition. All of those brands handily trounce even the best Deluxe Resorts. Hence Disney being better off competing on its own terms and differentiating its product offerings to minimize comparisons, as opposed to inviting them.
It’s the same story with Southwest versus the legacy carriers. The competitive advantage that Southwest had was its loyalty among its fans and families as being the convenient and friendly airline that offered perks and less friction. Southwest has built generational goodwill on the basis of its intangibles.
Even though it was technically a budget airline, Southwest has, over time, inched up into the pricing territory occupied by Delta, United, and AA. Despite that, it was still preferred by some travelers because it offered a distinct advantage via attitude, perks, and a traveler-friendly ethos.
In voluntarily giving that up for some reason, Southwest is going to invite freer comparison–and comparison shopping on price–via consumers. Travelers will try Delta, United, and American as a result.
That should be worrying for Southwest because, frankly, it cannot compete with those airlines on the overall experience. Those airlines offer premium cabins, lounges, international destinations & alliances, reward partners, and–most importantly–have invested significantly in their terminal and in-flight experiences in recent years. Southwest has none of that.
I have some degree of sympathy towards Bob (Jordan, not Chapek). He and other Southwest executives have fought a hard fight against activist investors, even as the airline has endured struggles. They tried to retain the ‘secret sauce’ that made Southwest, Southwest, but ultimately had to give in.
Part of this is happening no doubt because Wall Street is seeing the success that other domestic airlines are having in catering upmarket towards business and luxury travelers. That’s been a growth engine for Delta and United, and those legacy carriers have increased their premium product offerings to improve their businesses. Investors are salivating at that, and want the same for Southwest.
Not to stereotype or paint with too broad of a brush, but I would hazard a guess most Wall Street types have never flown Southwest. They don’t seem to grasp what it is–or rather, what it is not. Bluntly, Southwest is not an airline catering to business or luxury travelers. They are upending their business to chase a market that does not exist.
In the process, once families and leisure travelers who were loyal to Southwest have tasted the proverbial steak (and not even filet, since the U.S. legacy carriers aren’t that good compared to their international counterparts) of Delta or United, they aren’t going back to the hamburger helper that is SWA. I say this as someone who used to fly Southwest exclusively and still does from time-to-time. Every time I fly SWA, I remember why Delta is my favorite airline.
In terms of the Disney trip planning angle, that’s it. Don’t be a creature of habit and continue to fly Southwest if there’s no compelling reason for you to remain loyal. Vote with your wallet and feet, and jump to a different carrier. The ‘best’ airline for you will vary based on your home airport, but consider giving others a shot. For us, flying between Southern California and Orlando–or LAX to international destinations–Delta is far and away the best U.S. carrier. It’s not even a remotely close call.
Your mileage may vary, quite literally in this case.
The timing of this move by Southwest also strikes me as really odd. To Bob Chapek’s credit (words I hate typing), at least his approach to degrading the Walt Disney World guest experience was well-timed. It was done during a tumultuous time that offered Disney the cloak of the phased reopening as an excuse to reset the guest experience–and consumer expectations.
It’s obvious to us that was a convenient excuse, but more importantly, it was opportune timing. Disney under Chapek acted aggressively once it realized revenge travel was going to be a thing, and capitalized on pent-up demand and reduced consumer expectations to raise prices while cutting corners and removing perks. People kept packing the parks, regardless, because they were making up for lost time and traveling again.
Once it became clear that pent-up demand was running its course (some other things also happened), Disney seized the opportunity for another reset. It axed Chapek and brought back the Beloved Bob (Iger) to make popular decisions and be the fan savior for a bit, before becoming the villian. That’s the CliffNotes version, but the point is that Walt Disney World’s trajectory has been to improve the guest experience, fix things, and pull various “levers” to win over former fans and consumers–and that’s an arc that began over 2 years ago!
Southwest seems to have missed the memo that pent-up demand is over, and is speedrunning Walt Disney World’s misguided decisions from ~4 years ago. At least back then, the decisions–however misguided–could be leveraged for a short-term bump before a “hero” came back to restore the company to its former glory.
Instead, Southwest Airlines is doing this at a time when consumer confidence is cratering, markets are down, and a recession is looming. On the exact same day that SWA made this massive move, several other major airlines cut their earnings forecasts due to soft demand and economic uncertainty.
Southwest is also making this foundational paradigm shift while in a fundamentally different position from Walt Disney World. Regardless of how disappointed fans have been by dubious decisions of the Chapek regime, Walt Disney World still offered a compelling product and held unparalleled position as the market leader. Although Universal and other parks are competitors, there is no true substitute good for Walt Disney World. It would take a lot of truly terrible decisions to make Disney comparable to Six Flags (not for lack of effort).
By contrast, Southwest has put itself in a position where it now does have direct competitors and, as noted above, it’s inviting unfavorable comparison. Southwest is now on par with Delta, United, and American in terms of pricing…but not the overall quality of the experience. Experience-wise, Southwest is arguably positioning itself to be like Frontier and Spirit…but without the attractive pricing that causes travelers to overlook those airlines’ faults. This no man’s land that SWA is seeking to occupy makes the circumstances here completely different from Walt Disney World a few years ago, making this move all the more confounding. It’s a bold move, Bob, let’s see if it pays off for ’em!
Planning a Walt Disney World trip? Learn about hotels on our Walt Disney World Hotels Reviews page. For where to eat, read our Walt Disney World Restaurant Reviews. To save money on tickets or determine which type to buy, read our Tips for Saving Money on Walt Disney World Tickets post. Our What to Pack for Disney Trips post takes a unique look at clever items to take. For what to do and when to do it, our Walt Disney World Ride Guides will help. For comprehensive advice, the best place to start is our Walt Disney World Trip Planning Guide for everything you need to know!
YOUR THOUGHTS
What do you think of these changes at Southwest Airlines? Do these strike you as Chapekian short-term gains at the expense of long-term gains? Are you a fan of SWA or do you prefer other low cost or legacy carriers? Do you agree or disagree with our assessment? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!
The ONLY advantage left for us with SWA is the direct flight from IND to MCO, but we drove for years before we could afford to fly Spirit, and eventually SWA. We don’t fly enough to qualify under the new free bag policy, so we’ll likely go back to driving or taking our chances with Spirit or Frontier. The other concern for us is the new flight credit expiration dates. We typically only fly 1-2 times per year so if flight credit expires in 6 months for the cheaper tickets, they’ll expire before we use them.
What a perfect metaphor, Bob. Chapikian, indeed. Take what’s making a profit and is a unique value proposition and turn it upside down. And while I think it’s a stupid move, it won’t stop me from flying SWA, if the price is right. What it will do is get me to check other airlines. While their at it, I’m sure they will be taking a look at their website. to make it just as counterintuitive as Delta and American. Idiots.
No problem with charging for bags – it’s the removal of open seating (and charging extra for windows/aisle seats) that’s sending me packing.
This change won’t deter anyone, Tom. Some people gotta fly to Orlando no matter, and Southwest did it because they finally realized that they could, with no real penalty. Just watch. What it WILL do is encourage the use of more of those insufferable “Roll-Aboards” as passengers try to stuff half of their earthly belongings, things that they just MUST take with them on vacation, into the freebee overheads. Boarding time and patience will suffer accordingly. And if you want to get upset about something airlines, resorts and hotels do, not that it will change anything, how about addressing “surge” pricing? I travel for business. . . . lots. I have to book airlibes and hotels at the last minute . . . lots. Guess who’s subsidizing the vacation travelers who book months ahead at bargain-basement prices? Why should I pay exorbitant prices when businesses can make a profit booking at half what I’m paying? And please, spare me “supply and denand.” You have a room open therefore yiu have a commodity to sell. When you’re full, you don’t. To me, being almost sold out doesn’t justify a price increase.
I disagree. I’ve flown Southwest quite a bit and it’s always my preferred airline if possible, however I flew them knowing that it wasn’t always the ‘best’ flight. For example, coming from the West Coast Southwest never had a direct flight to Orlando, I’d always need to do at least one layover. The pricing has not been competitive with other airlines, however, the free bags, as well as just a generally feeling that Southwest wasn’t trying to nickle and dime it’s customers had me flying the less convenient flight for a better feeling flight. However, now with that free baggage gone, as well as the feeling of nickle and dime-ing coming into play, there’s no reason for me to look at the Southwest flight. Why would I take a flight that costs the same that I have to do a layover with over a direct flight?
Aryn is exactly right.
I don’t fly a ton, maybe a dozen flights a year or so. But I’ve been flying Southwest almost exclusively for the exact reasons Aryn mentioned for over a decade.
Now those reasons are gone, so Southwest competitive advantage is gone. Of course I’m still going to fly, just not with Southwest. Now there’s better products out there at similar and lower prices.
I also disagree. We flew Southwest specifically because of the free baggage policy. Even with having to drive 2.5 hours in the wrong direction in order to get to an airport that Southwest flew out of. Pay a ridiculous price to park (local airport is free parking, Midway in Chicago is not). I can fly American, Delta and United at my local airport or within half an hour of my home, and get free parking, if I am going to pay baggage fees anyway.
YES, WE DROVE TO INDY TO FLY SOUTHWEST WITH FREE LUGGAGE AND BETTER TIMES TO ORLANDO. BUT WE CAN FLY DIRECT FROM FORT WAYNE WITH ALLGIANT – THEY ADD ALL SORTS OF FEES, SO IT IS A PAIN TO FIGURE OUT BEST FLIGHT. FROM NOW ON IT WILL BE EASY – JUST SEE THE FLIGHT COSTS, WHICH WERE ALWAYAS A BIT HIGHER FOR SOUTHWEST.
“Why should I pay exorbitant prices when businesses can make a profit booking at half what I’m paying?”
You answered your own question… it’s because they can, so why wouldn’t they?
Such a disappointing announcement as I had just gotten home via Southwest the evening before coming back from Disney World. You are spot on, they had their niche market pretty much to themselves and now are in no man’s land. Most business trips don’t utilize Southwest already so this isn’t going to make them start and families will start exploring more options. Planning a big trip for a family just keeps getting harder and harder.
I also burst out laughing upon seeing this perfectly apropos title!! Agree with everything you’ve said here. Reflecting on 20-25 trips almost exclusively on Southwest to WDW or Disneyland in the past 6-7 years, it was a great run especially during COVID era when travel elsewhere was complicated. Southwest’s moves following Disney’s emphasize all the more that those days are over. I am looking forward to expanding my travel horizons elsewhere this year and looking at a Delta or American credit card now for their overseas offerings rather than prioritizing SWA points as I used to.
Even though Southwest has a major presence here in Phoenix, I can’t think of the last time I flew with them. I always comparison shop them for for price and times, but they never come out cheaper to justify the hassles of 24-hour checkin and finding a seat together. We have a credit card that gets us free bags on another airline so that doesn’t sway us.
More telling commentary would come from my son and his wife, who are have been very Southwest loyal until now. They have the credit card that would get them a free bag (one per card? per passenger?) but accumulating fewer points flying and less value redeeming them may drive them elsewhere.
He will run that into the ground as well. He has no idea of customer loyalty has a limit
Sad turn of events for sure. This one hurts. Southwest has been one of the few “feel good” brands still out there, the guy I was rooting for.
We are light travelers in general, but we used Southwest exclusively for skiing (because checking 4 pairs of skis is expensive otherwise), and otherwise tried to use them because it was generally easy to find 4 seats together at the back of the plane.
I’ll cash in all of our points on one last flight, and then only use them moving forward if they’re the cheapest option (which they almost never are). I doubt that I’m alone in this assessment.
Now, I don’t have a fancy Business degree, but if anyone can explain to me the upside of pursuing an extra $1-1.5B in order to ultimately LOSE $1.8B I would love to hear it.
The simplest answer probably holds the most truth. Elliot Management, which only took a share in the company last year, will take their profits when Wall Street pops up the price of Southwest stock in the short term. What happens to the actual Southwest company in the long term has no effect on EM’s plan.
Hopefully Southwest’s plan won’t last as long as Chapek’s term at Masimo (less than a year).
Aaron is 100% on the money.
The $300 million loss is in the long term. The boost is in the short-term. It comes down to a time horizon mismatch, and the vultures wanting to pump the stock and move on. That’s presumably why management fought this in the first place–since they’ll still be around to pick up the pieces and rebuild once the damage starts being felt. (Or not, since the c-suite will likely be scapegoated and replaced with fresh blood as part of a ‘back to basics’ campaign, whenever that inevitably does happen.)
I do have a fancy a business degree, it does not make any sense.
This is one of the dumbest business decisions I’ve seen in a long time.
Aaron is probably right, EM is probably trying to grab their profits in a couple months and run. But, I’m skeptical that will even work. I think Southwest’s revenue and market share numbers are going to drop far more than they anticipate and sooner then they anticipate. I wouldn’t be surprised if the stock is 50% lower in a year.
Maybe the customer backlash will be enough to reverse this decision. When I see accounts on social media that have nothing to do with travel making jokes about Southwest ruining their brand, it’s a good indication this has escaped the travel “bubble” and gone mainstream.
An answer in all seriousness:
It is difficult to estimate the full impact of these sorts of decisions. They rely on a lot of assumptions, so different people can end up creating different estimates. The estimates cited by Tom earlier in the article were from last year, however the executives said newer estimates said they would come out ahead.
The free bags do in fact create challenges that should be acknowledged
1. The government taxes airlines differently when the bag fee is included in your ticket, which meant Southwest is paying $75M extra taxes per year by not itemizing the bags.
2. Southwest prices with bags were being compared to other airlines without bags, putting Southwest at a disadvantage.
All that said, I disagree with Southwest’s decision, but those reasons should be recognized.
My initials are literally “SWA” but I’ve never flown Southwest. Certainly don’t plan to start now.
Getting kids ready for school- will read this in a bit. I assume there is less for more? Perhaps a line skipping service at a fee?
Ugh! Literally the ONLY thing that was keeping SW “special” when compared to other airlines is now going away!? This, after their announcement that they were NOT going to start charging bag fees & to not worry I hate this & will now have to shop around for my trips to WDW, from PIT.
Absolutely hilarious and spot-on commentary. Southwest chasing Business and First Class customers when they don’t even have a network of their own lounges is a ridiculously bad strategy. As you said, they are turning away their bread and butter of families to chase a market that for them does not exist. It’s baffling.
I definitely see this having other affects on the habits of WDW travelers. Anyone that stocked up on breakfast items, snacks and similar such food items to bring with them via the free checked bags will instead have to either pay the extra bag fees or (more likely) they will figure out grocery delivery or pay for a car service that includes a stop at a store. Either way it is another expense and another frustration to deal with for trip planners.
I LOL’ed just at your headline!! And I knew I’d get your spot-on insightful analysis, too. What a *horrible* series of decisions. I understand if SWA isn’t (wasn’t) your thang, but it was so nice to have them as an option. No they have zero differentiation in a market of blah. May Elliott Management quickly go bankrupt.
This makes me sad. We are loyal to Southwest. Phoenix to Anaheim (Disneyland express) is our ride, and we love the ease of booking, times, free bags, etc. and we always fly SW to Chicago and Colorado. Those last two destinations always include checked bags (visiting our kids and granddaughter). We will check Delta and other airlines now. Southwest has sold out and is no longer special.
I don’t have a chance to use SWA but any airlines that charges for one bag is outrageous. What do they expect us to do? Go Naked?
“No, Mr. Bond. We expect you to …. payyyy”
This isn’t as common as it once was, but in many major markets the major carriers have traditionally pegged their fares to Southwest’s sale fares. That’s why for the past 20+ years I’ve usually bought my flights on Tuesdays and Wednesdays — I barely fly Southwest but when their sales drop mid-week American and United follow suit if Southwest flight is comparable with one of theirs (like within an hour or two). Most travel sites/blogs say this is a myth but I can tell you from much research and experience that it’s 100% still the best idea to purchase fares mid-week (I’m not talking about FLYING mid-week, though that’s also usually a money saver).
In a perverse way these changes might actually benefit the non-Southwest flyer because since baggage and other fees have been “baked in” to Southwest fares, now by charging for bags (and adding a basic economy tier) Southwest will have the ability to publish lower fares. And they’ll need to do that to retain market share, as Tom noted above. But if Southwest publishes lower fares, the major carriers will in many cases lower their fares commensurately to match (or come close to matching).
One last note: when I do fly Southwest next I’m not going to complaining about having an assigned seat (even if it costs a few bucks to reserve) vs. having to stop everything I’m doing exactly 24 hours before my flight to play the check-in game (essentially the same as virtual queuing at WDW). To get a boarding position that still often leaves uncertainty about getting a good seat….
Hi Tom,
First heard on the morning newscast about the SWA changes. My first “groggy” thoughts were ‘there goes the advantage of going to St. Louis (STL) or Indy (IND) to fly Southwest’. O’Hare (ORD) and Midway (MDW) are less advantageous as parking fees usually eat up any savings.
We live 5 minutes from our local airport. Service from American, Delta, Allegiant and Frontier (seasonally). In the past we could often save by using SWA at STL or IND. Even factoring in the parking fees. There were other advantages as more departures, more non-stop flights, and reasonable, close by hotels for those 5:30/6:00AM flights. But within the last year and a half prices have caused the difference to nearly evaporate. Sometimes the free checked bag fees were the only savings. Then as time went on all the miscellaneous fees made the difference to be $10/20. And the local airport is only 5 minutes away. The 5 minutes proximity becomes very attractive plus the fact that our local airport and others in our area offer free parking. You end up paying somewhere. Time or Money.
We will never fly enough to qualify for the new classifications to reap any benefits. So, saving money up front is very important.
Tom, great choice of photos to accompany your post! Love the dark Disney entrance, Kylo Ren, the judge from Toad’s Wild Ride. Classic! I think we need a post on how you organise your million photos and then choose and place them in your posts.
I’ve always loved his photo’s and try to tell him so from time to time. Great photographer!!!!