Does Southwest’s “Bags Fly Free” Policy Hurt On-Time Performance?

Southwest Airlines uses its “Bags Fly Free” policy of not charging passengers for their first two checked bags to set itself apart from all its competitors who have begun charging these fees in recent years. A recently released study claims this no-fee practice may actually be hurting the airline, though other data raises questions about this conclusion.

The study, published in the Management Science journal, tracked the impact of airlines’ decision to charge for checked bags had on its operations, The Dallas Morning News reports. 

Researchers looked at about nine million domestic flights between May 2007 and 2009 — the timeframe in which many carriers announced they would implement baggage fees.

While the report took consideration for other kinds of delay — weather, airline, aircraft maintenance — it found that almost immediately after the bag fees went into effect, airlines’ delays dropped by an average of two minutes.

“What we found is an improved departure delay performance right after airlines started to charge bag fees,” Mazhar Arikan, a business professor at the University of Kansas who co-authored the study, says.

In all, the report found that as more customers tried to avoid airlines’ fees by carrying on their belongings, they inadvertently helped to streamline the baggage handling process for many carriers.

Except, perhaps, Southwest, which continues to allow passengers to fly (some of) their bags for free.

According to the report, Southwest saw a smaller benefit from its rivals’ fees. In fact, the airline’s on-time performance was slightly worse than other carriers — just a few minutes.

Given that this study only looked at on-time performance data from 2007 to 2009, we wanted to see how Southwest’s on-time performance stacks up nearly a decade later.

Looking at the FAA’s Air Travel Consumer Report filings, we found that airlines’ on-time performance varies wildly from year to year.

For example, according to the most recent FAA Consumer Report — which includes data for the 12 months ending June 2016 — 81.3% of all Southwest flights arrived on time during this period. That’s slightly below the industry average of 82.1%, with the airline ranking seventh of the twelve carriers in the report.

Yes, some carriers with checked-bag fees ranked higher, like United (#4; 82.1%) and Delta (#2; 87.3%), but so did worse-performing airlines like American (#8; 81.2%) and JetBlue (#11; 76%).

Making the data hazier, these percentages and ranks bounce around throughout the year, and across the historical data.

In just the last few quarters, Southwest has ranked as high as #4 (84.1%) on the Report and as low as #9 (74.3%). Looking back at recent years’ Reports, the airline has largely been in the middle-of-the-pack, though it has had some quarters where it ranked dead last among all major airlines and where its on-time performance dropped well below 70%.

In 2014, when on-time arrivals seemed to bottom out at 67.6%, Southwest’s baggage handlers blamed delays on an airline that was cramming too many passengers into too few planes and trying to fly too many routes.

Whatever role the “Bags Fly Free” policy might play in these problems, the airline’s CEO has repeatedly defended it.

Last year, CEO Gary Kelly said the option wasn’t going anywhere, noting that it was tied to tightly to the company’s brand and loyalty to customers.

Bags fly free policy could cost Southwest Airlines in unexpected way [The Dallas Morning News]