Southwest Airlines is officially ending its long-standing policy of free checked baggage, a move that signals a major shift in its business strategy. Starting May 28, the airline will introduce baggage fees for the first and second checked bags, with exemptions for A-List loyalty members, business fare travelers, and credit card holders.

This decision comes after Southwest’s recent policy changes, including the introduction of assigned seating and premium ticket options. CEO Bob Jordan stated that the airline is adapting to evolving customer preferences and aiming for improved profitability.

Southwest’s “Bags Fly Free” slogan has been a cornerstone of its brand for decades, setting it apart from competitors that have long charged baggage fees. However, market data showed that customers increasingly prioritize ticket prices over baggage perks. Analysts predict that while the change may alienate some loyal customers, it could significantly boost Southwest’s revenue, given the high volume of checked bags on its flights.

Rival airlines see this as an opportunity to attract former Southwest passengers. Delta and United executives have already commented that the shift could work in their favor. Despite potential customer backlash, Southwest’s stock surged more than 6% following the announcement, indicating investor confidence in the move.