Southwest Airlines'New guidelines just like the first time on charging for checked bags could backfire, said Fitch Ratings on Thursday.
Southwest reverses his a long time of two “Bags Fly Fly Free” guidelines for a checked luggage in May, although there are exceptions for travelers with a south-western bank card, elite health-flyer status or who buy the very best classes from tickets.
It also starts assigned seats and a fundamental economy tariff without spring and said that avalets might be canceled.
Fitch spent a negative evaluation outlook for the corporate, which has long been known for its strong balance sheet, since “southwest may be relocated to less conservative capital allocation and financial policy, while ongoing strategic changes have the potential to influence themselves compared to network companies.
“Objects to enhance profitability reminiscent of the introduction of bag fees and to the run of missions risks that undermine the competitive strengths of the Southwest in comparison with the identical age,” said Fitch.
Social -Media contributions from the southwest, even if they have no political changes, have made angry comments on the shifts, but the loss of market share, if at all, “uncertain” the company noted.
Southwest refused to comment on the new prospects of Fitch. The airline has a more intensive pressure to improve margins because the activist Hedgegunde Elliott Investment Management took over a participation in the airline and later won five seats in a settlement last year.
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