Is Southwest Airlines Going to Charge for Bags? Yes. No. Maybe? Hard to Say.

Southwest Ad3.jpeg
Back in June of '08, we pointed your attention toward the Southwest Airlines ad at right, which first appeared in the Wall Street Journal. It was, of course, a statement: American Airlines, and the other carriers, might be charging for bags, but not your beloved low-cost Dallas-based Southwest, nowaynosir.

But during yesterday's earnings conference call, Southwest CEO Gary Kelly was asked by a Morgan Stanley analyst whether the airline might, ya know, reconsider that no-fee promise. Seeking Alpha has the entire transcript worth a look-see, but here's the relevant Q and A for our purposes:
William Greene -- Morgan Stanley
Gary, you've had some experience now with putting in place some fees. I'm wondering if you can talk at all about maybe some of the, I don't know, were there any takeaways from that? Was the customer pushback so aggressive that you wouldn't consider bag fees now? When we think about a loss in the third quarter, it would seem that bag fees could go some way to helping you in that regard.

Gary C. Kelly
A great question, Bill, and good morning. I think the reaction we've had to the pets -- which is not really a fee; that's really just offering a fare to a new category of customer, who we love and adore -- but the fee for the unaccompanied minors, our customers, I think, I wouldn't say that they've embraced it, but they certainly haven't reacted negatively. I think people understand that there's an added cost associated with serving our younger flyers. So, no, I think that so far so good.

With respect to fees in general, Bill, which I know is really the essence of your question, you know my personal feelings about bag fees. And I think in this environment we've got to be open minded to anything, quite frankly.

You shouldn't interpret from that that we've made a decision to charge for bags because we have not. But I do think that now that the landscape has settled down and most all of our competitors are charging bag fees, it just puts us in a position where we can evaluate results, compare to ours and make an informed judgment about that. The one thing that we know is that our employees will likely not support bag fees if our customers don't, so if we are going to make a change we'll need to do it in the right way.
Kelly goes on about that point, but you get the gist of it.
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