Southwest Airlines, already under fire for getting rid of its free checked bags perk for most customers, is quietly making another change.
According to Inc., it involves a process known as “fuel hedging,” which is the idea of having a financial team that figures out when to buy future jet fuel at predetermined prices, ensuring against the risk that prices will later rise.”
Inc. reported that Southwest is now moving away from the practice, which gave passengers an advantage over the years. In fact, on its website, Southwest posted a lengthy article that extols the smartness and benefits of fuel hedging and expressly tying the practice to its previous ability to offer free checked bags.
“From 1998 to the summer of 2008, Southwest saved an estimated $3.5 billion over what it would have spent if it had paid the industry average for jet fuel,” the website says. Over the years, the practice has allowed the airline to offer “low-cost air travel.”
But now executives are talking a different tune.
“With the exception of a couple of positive years, it’s not been beneficial to the company” for years, CEO Bob Jordan told The Wall Street Journal.
“The discontinuation of our fuel hedging program is another step along our path to transforming our business. This change will result in significant savings in hedge premiums as we move forward,” Tom Doxey, Southwest’s CFO, said to WSJ.
This comes on the heels of the airline’s free checked bag change.
“For reservations booked and ticketed or changed on or after May 28, 2025, checked baggage fees will apply. We will offer two free checked bags to our Rapid Rewards A-List Preferred Members and Business Select® Customers, and one free checked bag to A-List Members and other select Customers. Southwest® will credit the first checked bag for Rapid Rewards Credit Cardmembers. Weight and size limits apply,” Southwest says on its website.
