(DALLAS) — A shift is on the horizon at Southwest Airlines. The carrier known for its customer-friendly policies and affordable airfare announced changes to its baggage and fare structure in an effort to cater to a broader range of travelers.
While the low-cost airline has long stood out for offering two free checked bags for all passengers, starting May 28, some customers will see charges for checked baggage.
The most notable change from the Dallas-based carrier that was announced Tuesday impacts those not holding certain status levels with Southwest’s Rapid Rewards program.
Southwest Airlines will continue to offer two free checked bags to Rapid Rewards A-List Preferred Members as well as its Business Select travelers.
A-List Members and other select customers will still receive one free checked bag, the airline said. However, those without qualifying status will now face a charge for their first and second checked bags, subject to weight and size limitations.
“We have tremendous opportunity to meet current and future customer needs, attract new customer segments we don’t compete for today, and return to the levels of profitability that both we and our shareholders expect,” President and CEO Bob Jordan said.
Why Southwest is changing baggage fees?
For passengers traveling on lower-priced fares, such as Wanna Get Away or Wanna Get Away Plus, the changes outlined reflect a move toward more targeted options for a range of travelers from budget conscious to frequent flyers, which the airline hinted at in December.
Southwest Rapid Rewards program points changes, assigned seats and more
In addition to the new baggage fees, Southwest’s Rapid Rewards program will also have some changes for earning points.
Customers who fly Business Select will earn more points, while those on lower-tier options — like Wanna Get Away fares — will earn fewer.
The airline is also introducing a new Basic fare category for the lowest-priced tickets starting May 28 ahead of rolling out assigned seating and extra legroom options.
“We’re evolving our business to create more choice for our current and future customers,” Jordan said.
Southwest is working to expand its reach with flights now available to book through Expedia, and an industry-standard partnership with Icelandair.
Flight credits issued for tickets purchased on or after May 28 will expire one year or earlier from the date of ticketing, depending on the fare type purchased.
(NEW YORK) — China issued a warning on Wednesday night that it stands ready for any “type of war” with the United States in the aftermath of tariffs imposed hours earlier by the Trump administration.
A spokesperson for the Chinese foreign ministry said the tariffs would not lead to a resolution of U.S. concerns about fentanyl originating in China.
“If the U.S. truly wants to solve the fentanyl issue, then the right thing to do is to consult with China on the basis of equality, mutual respect and mutual benefit to address each other’s concerns,” Chinese spokesperson Lin Jian said at a press conference late Tuesday.
“If the U.S. has other agenda in mind and if war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” Jian added.
The remarks came soon after the Trump administration imposed 25% tariffs on goods from Mexico and Canada, as well as 10% tariffs on imports from China. The fresh round of duties on Chinese goods doubled an initial set of tariffs placed on China last month.
Within minutes of the new U.S. tariffs taking effect, China unveiled on Tuesday its initial response by placing additional 10% to 15% tariffs on imported U.S. goods, like chicken, wheat, soybeans and beef.
Those duties will be on top of similar tariffs imposed back during the first Trump administration’s trade war in 2018. Some of those tariffs are already at 25%, though Beijing issued some waivers as a result of the 2020 “phase one” trade deal.
The new Chinese tariffs are set to come into effect for goods shipped out next Monday, March 10.
In a series of social media posts last month, Trump said he would place tariffs on Canada, Mexico and China for hosting the manufacture and transport of illicit drugs that end up in the U.S.
During an address to a joint session of Congress on Tuesday night, Trump also sharply criticized tariffs imposed by the Chinese government on U.S. goods.
“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement on Tuesday.
Commerce Secretary Howard Lutnick said on Tuesday afternoon that Trump may soon offer Canada and Mexico a pathway to relief from tariffs placed on some goods covered by North America’s free trade agreement.
Lutnick did not mention a potential compromise with China.
(WASHINGTON) — The Federal Reserve on Wednesday will announce its latest decision setting the level of interest rates, just days after President Donald Trump called on the central bank to lower them.
Investors widely expect the Fed to hold interest rates steady, putting the central bank on a potential collision course with Trump. A longstanding norm of independence typically insulates the central bank from direct political interference.
A decision to maintain the current level of interest rates would pause a series of three consecutive interest rate cuts imposed by the Fed over the final months of 2024.
The Fed indicated last month that it would cut interest rates at a slower pace than it had previously forecast, however, pointing to a bout of resurgent inflation. That forecast sent stock prices plummeting, though markets have broadly recovered the losses.
Inflation has slowed dramatically from a peak of more than 9% in June 2022, but price increases remain nearly a percentage point higher than the Fed’s target rate of 2%.
During a virtual address to the World Economic Forum in Davos, Switzerland, last week, Trump demanded a drop in interest rates after calling for a reduction of oil prices set by a group of nations known as OPEC, which includes Saudi Arabia.
The prospect of low oil prices will enable the Fed to dial back its fight against inflation and bring down interest rates, Trump said.
“I’m going to ask Saudi Arabia and OPEC to bring down the cost of oil,” Trump said, later adding: “With oil prices going down, I’ll demand that interest rates drop immediately.”
The U.S. does not belong to OPEC, nor does the president play a role in the organization’s decisions regarding the price of oil sold by its member states.
Several past presidents have sought to influence the Fed’s interest rate policy, including Trump, who repeatedly spoke out in favor of low interest rates during his first term.
On the campaign trail in August, Trump said a U.S. president should have a role in setting interest rates.
Fed Chair Jerome Powell struck a defiant tone in November when posed with the question of whether he would resign from his position if asked by Trump.
“No,” Powell told reporters assembled at a press conference in Washington, D.C., blocks away from the White House.
When asked whether Trump could fire or demote him, Powell stated: “Not permitted under the law.”
The Fed retreated in its fight against inflation over the final months of last year, lowering interest rates by a percentage point. Still, the Fed’s interest rate remains at a historically high level of between 4.25% and 4.5%.
Last month, Powell said the central bank may proceed at a slower pace with future rate cuts, in part because it has now lowered interest rates a substantial amount.
Powell also said a recent resurgence of inflation influenced the Fed’s expectations, noting that some policymakers considered uncertainty tied to potential policy changes under Trump.
“It’s common-sense thinking that when the path is uncertain, you get a little slower,” Powell said. “It’s not unlike driving on a foggy night or walking around in a dark room full of furniture.”
(NEW YORK) — The stock market surged on Wednesday afternoon after the Trump administration granted automakers a one-month exemption from tariffs imposed a day earlier.
The Dow Jones Industrial Average climbed about 550 points, or 1.3%; while the S&P 500 jumped 1.25%. The tech-heavy Nasdaq increased 1.5% on Wednesday.
Press Secretary Karoline Leavitt said President Donald Trump had ordered the delay of auto tariffs after a request from the Big 3 U.S. automakers: Ford, General Motors and Stellantis, the parent company of Jeep and Chrysler.
“The president is giving them an exemption for one month so they’re not at an economic disadvantage,” Leavitt said during a press conference at the White House.
The tariffs are expected to pose a challenge for U.S. automakers, many of which depend on a supply chain closely intertwined with Mexico and Canada.
While easing some tariffs, Trump criticized Canada on Wednesday for what he described as failure to take the steps necessary for the United States to withdraw all of the tariffs imposed a day earlier.
Trump said he held a call with Canadian Prime Minister Justin Trudeau on Wednesday during which the two leaders discussed a path to U.S. withdrawal of the tariffs, Trump said, noting such an outcome would require sufficient action by Canada to address drug trafficking.
A week ago, Trump alleged that illicit drugs such as fentanyl had continued to enter the U.S. through Mexico and Canada despite agreements reached last month to address the issue.
In a post on Truth Social on Wednesday, Trump said, “nothing has convinced me” that the flow of fentanyl into the U.S. had stopped.
“[Trudeau] said that it’s gotten better, but I said, ‘That’s not good enough.’ The call ended in a ‘somewhat’ friendly manner!” Trump said.
Since September, nearly all fentanyl seized by the U.S. came through the Southern border with Mexico, according to the U.S. Customs and Border Patrol, or CBP, a federal agency. Less than 1% of fentanyl was seized at the Northern border with Canada, CBP found.
Canadian Prime Minister Justin Trudeau sharply criticized the tariffs on Tuesday, calling them a “dumb” policy that does not “make sense.”
The reason for the tariffs is based on a false allegation about Canada as a major source of drugs entering the U.S., Trudeau added.
Persistent tensions between the U.S. and Canada emerged after China issued a warning on Tuesday night that it stands ready for any “type of war” with the United States in the aftermath of tariffs imposed by the Trump administration.
The U.S. slapped 25% tariffs on goods from Mexico and Canada, as well as 10% tariffs on imports from China. The fresh round of duties on Chinese goods doubled an initial set of tariffs placed on China last month.
A spokesperson for the Chinese foreign ministry said the tariffs would not lead to a resolution of U.S. concerns about fentanyl originating in China.
“If the U.S. truly wants to solve the fentanyl issue, then the right thing to do is to consult with China on the basis of equality, mutual respect and mutual benefit to address each other’s concerns,” Chinese spokesperson Lin Jian said at a press conference late Tuesday.
“If the U.S. has other agenda in mind and if war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end,” the spokesperson added.
The comments came soon after the Trump administration imposed 25% tariffs on goods from Mexico and Canada, as well as 10% tariffs on imports from China. The fresh round of duties on Chinese goods doubled an initial set of tariffs placed on China last month.
Within minutes of the new U.S. tariffs taking effect, China unveiled on Tuesday its initial response by placing additional 10% to 15% tariffs on imported U.S. goods, like chicken, wheat, soybeans and beef.
“The retaliatory tariffs that China is imposing is very specific and directly targeted at American farmers, who are mostly in red states and mostly voted for Trump,” Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis, told ABC News.
“So China is trying to create pain where it matters for Trump, and it’s hoping to get Trump to the negotiating table and offer relief for this group of Trump supporters,” Thomas added.
The recent duties will be placed on top of similar tariffs imposed by China during the first Trump administration’s trade war in 2018. Some of those tariffs are already at 25%, though Beijing issued some waivers as a result of the 2020 “phase one” trade deal.
The new Chinese tariffs are set to come into effect for goods shipped out March 10.
In a series of social media posts last month, Trump said he would place tariffs on Canada, Mexico and China for hosting the manufacture and transport of illicit drugs that end up in the U.S.
During an address to a joint session of Congress on Tuesday night, Trump also sharply criticized tariffs imposed by the Chinese government on U.S. goods.
“President Trump continues to demonstrate his commitment to ensuring U.S. trade policy serves the national interest,” the White House said in a statement on Tuesday.
Commerce Secretary Howard Lutnick said on Tuesday afternoon that Trump may soon offer Canada and Mexico a pathway to relief from tariffs placed on some goods covered by North America’s free trade agreement.
Lutnick did not mention a potential compromise with China.
ABC News’ Selina Wang, Kevin Shalvey, Karson Yiu and Ellie Kaufman contributed to this report.
