Southwest Airlines announced on Tuesday that it will begin charging for checked bags, marking the end of a long-standing policy that had distinguished it from other carriers. The decision comes as the airline seeks to increase revenue and reduce costs.

Southwest Will Begin Charging for Checked Bags, Ending a Popular Policy

Passengers with the highest loyalty status will continue to receive free checked bags, but all other travelers booking flights from May 28 onward will be subject to the new fees. This shift reflects Southwest’s latest move away from a signature policy that had made it stand out—and attracted customers—for years.

In addition to this change, the airline is introducing premium seats with extra legroom, discontinuing its open-seating model, and has recently launched red-eye flights. When Southwest first unveiled these updates in September, it reassured customers that its popular baggage policy would remain unchanged, citing internal research that identified it as a key competitive advantage.

However, that stance has now changed. At an investor conference on Tuesday, Glen Hauenstein, president of Delta Air Lines, was asked whether Southwest’s decision could benefit other airlines. He responded, “Clearly, some customers chose them because of that, and now those customers are up for grabs. We’ll see how it plays out.”

Southwest’s policy of allowing two free checked bags had been a costly one. The airline handles nearly twice as many checked bags as its competitors, which can slow down operations, CEO Bob Jordan noted at the conference.

Despite earlier studies highlighting the policy’s appeal, more recent data from third-party booking platforms—an area Southwest has expanded significantly over the past year—suggest that free checked bags were not as strong of a competitive advantage as previously believed.

“Our latest data did not show that we were gaining the same benefit from our bundled offering with free bags, which led us to reassess our assumptions,” Jordan explained.

Southwest has also faced mounting pressure from investors to implement changes as it struggles to control costs. While other major airlines have capitalized on the growing demand for premium and international travel, Southwest has lacked the high-end services and long-haul routes needed to tap into those lucrative markets.

Hedge fund Elliott Management saw an opportunity in Southwest’s challenges. Last summer, the firm revealed that it had acquired a 10 percent stake in the airline and began pushing for reforms—many of which Southwest has now implemented. Elliott also called for Jordan’s removal but dropped that effort after the airline agreed to restructure its board of directors.

Passengers who hold A-List Preferred status or purchase the airline’s highest-tier ticket, Business Select, will still receive two free checked bags. Those with A-List status will get one free checked bag, while all other customers will need to pay a fee, the exact amount of which has not yet been disclosed.

The decision has drawn criticism from some travelers and industry analysts.

“I think we’ll look back on today as the day Southwest lost its identity,” wrote Brett Snyder, a former airline insider and aviation blogger at Cranky Flier. “Everything that made it unique has vanished faster than you can say, ‘Elliott Investment Management.’”

Still, some in the industry believe the impact of the change will be less dramatic. At the same investor conference on Tuesday, United Airlines CEO Scott Kirby described the move as a significant step for Southwest but suggested it could ultimately work in the airline’s favor.

“It’s the slaying of a sacred cow,” Kirby remarked.