Southwest Airlines will begin charging customers a fee to check bags, abandoning a decades-long practice that executives had described last fall as key to differentiating the budget carrier from its rivals.

Southwest, which built years of advertising campaigns around its policy of letting passengers check up to two bags for free, said Tuesday that people who haven’t either reached the upper tiers of its Rapid Rewards loyalty program, bought a business class ticket or hold the airline’s credit card will have to pay for checked bags.

The airline did not outline the fee schedule but said the new policy would start with flights booked on May 28.

“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,” CEO Bob Jordan said in a statement.

Less than a year ago, the Dallas-based airline announced it was doing away with another tradition, the open-boarding system it has used for more than 50 years. Southwest expects to begin operating flights with passengers in assigned seats next year.

Southwest has struggled recently and is under pressure from activist investors to boost profits and revenue. The airline reached a truce in October with hedge fund Elliott Investment Management to avoid a proxy fight, but Elliott won several seats on the company board.

The airline announced last month that it was eliminating 1,750 jobs, or 15% of its corporate workforce, in the first major layoffs in the company’s 53-year history.

The job cuts, which were scheduled to be mostly completed by the end of June, are part of a plan to slash costs and transform the company into a “leaner, faster, and more agile organization,” Jordan said at the time.

Warnings from top airlines

In other airline news Tuesday, American Airlines Group and Delta Air Lines issued a warning shot about the U.S. economy: Consumer spending has pulled back sharply as economic worries have ratcheted up.

American on Tuesday roughly doubled its loss expectation for the first quarter, hours after Delta slashed its profit guidance in half. The carriers are reining in expectations in the face of a broad and rapid reversal of demand trends that had buoyed the industry heading into 2025.

The first quarter has been “a parade of horribles,” Delta Chief Executive Officer Ed Bastian said Tuesday at an investor conference.

The air travel market is facing a litany of challenges, from economic volatility to bad weather to a series of high-profile aviation accidents that are spooking some flyers. Consumer spending is under pressure as actions by President Donald Trump’s administration, including imposing tariffs and enacting sweeping federal job cuts, bring uncertainty.

American now anticipates a loss of as much as 80 cents a share in the three months ending March 31, according to a statement Tuesday. The carrier previously predicted a deficit of no more than 40 cents a share, while analysts expected a 28-cent loss on average.

American also trimmed its sales expectations, saying “the revenue environment has been weaker than initially expected.” It now predicts flat revenue in the first quarter, compared with a prior forecast of as much as a 5% rise.

Bloomberg contributed to this report.