Your Business Doesn’t Matter to Us Anymore

Back in the 1970s, there were over 150 airlines operating in the United States, including major airline names like, Pan Am, TWA, Braniff, Northwest, National, Western and Continental in addition to American, United and Delta.

The United States clearly did not need another airline. In fact, only 15% of the potential passenger market travelled by air back then!

Southwest felt differently. They were not interested in competing for that 15%.  They wanted to get the other 85%, who usually travelled by car.

Southwest felt that this 85% was grossly underserved by the major airlines and their mission was to serve that market.  So, they created a persona for that market which can best be characterized as  “The Common Man.”

Southwest determined that the common man wanted three things from their airline – things that were cheap, simple and fun.  And so, they built an airline whose marketing and airline experience stressed those points:

• Cheap            Fares were cheaper than competitors, credits didn’t expire.
• Simple            Open seating, very simple pricing structure, later on: a most easy to navigate website
• Fun                 Creative marketing “You are free to move about the country”, irreverent announcements, casual clothing for flight attendants

Even when the major airlines started charging for checked bags in the mid-2000s, Southwest still kept its brand promise of cheap by announcing that they would not charge for bags.  Of course, in keeping with their brand promise, they announced it in a “fun” way – “Bags Fly Free” accompanied by a whimsical picture of a suitcase with wings.

That all changed on March 11, 2025. Southwest announced they were going to charge for checked baggage. Which came after announcing in December they would transition to assigned seats.

Southwest had abandoned the common man

Their CEO confirmed it in the announcement of the changes – “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.”

In essence, Southwest is now going to be just another airline competing for the same customers with the same services.

It reminds me of one of the biggest corporate blunders in recent memory when in 1985, Coca-Cola reformulated its classic soda to compete more directly with Pepsi, replacing its original recipe with “New Coke.” This move alienated Coke’s loyal customer base.  Public outrage forced Coca-Cola to bring back Coca-Cola Classic just months later, proving how risky abandoning a core customer base can be.

As one analyst in the Wall Street Journal said yesterday:

“This is how you destroy a brand. This is how you destroy customer preference. This is how you destroy loyalty.

When 97% of your customers say they fly you because of your ‘bags fly free’ policy and you make dramatic changes to it, you are telling almost all of your customers,

‘Your business doesn’t matter to us anymore.’”

And that is not a prescription for sustainable growth.