Southwest Airlines has ended its popular Bags Fly Free policy, a move that may signal the end of an era for the airline’s unique brand identity. The policy, which was a key driver of customer loyalty and purchase decisions, is being phased out in favor of more profitable business models.
The loss of this policy is significant, as it marked one of the few times Southwest got to offer something other than its core products at a low price. Other companies, like Ikea and Trader Joe’s, have long used loss-leaders – or products and services that sell for less than cost due to customer demand – to draw in customers.
However, the departure of this policy may lead to a loss of brand equity and customer loyalty. According to Southwest CEO Bob Jordan, Bags Fly Free was the number one reason why customers chose the airline, making it an essential part of its business model.
Southwest’s decision to end the policy comes at a time when the airline is facing financial pressures. In 2022, the company settled a lawsuit with activist investor Elliott Investment Management by giving up board seats and promising changes designed to increase profitability.
While this change may be welcomed by Wall Street analysts who have praised the move as a step towards making Southwest more profitable, it marks an end to an era of customer-centricity for the airline. As one analyst noted that the end of Bags Fly Free policy is “a major blow to the company’s brand identity.”
The departure of this policy serves as a reminder that businesses must constantly evaluate their offerings and ensure they remain relevant to customers. By offering unique products or services at low prices, companies can build customer loyalty and drive sales.
In an era where brands are increasingly being defined by their core values and mission statements, the demise of Southwest’s Bags Fly Free policy highlights the importance of staying true to one’s brand identity – even if it means sacrificing short-term profits.
Source: https://www.inc.com/bill-murphy-jr/southwest-airlines-just-broke-the-5-chicken-rule-and-there-goes-what-once-made-it-great/91161331