Southwest Airlines, one of several low-cost airlines in the United States, is famous for not charging any baggage fees for domestic travelers, but in light of the financial blows it has endured recently from the economic slump, the airline plans to start charging for other services to recover its losses. Southwest recently reported that a decline in demand for corporate and business travel has caused significant losses for the third quarter of 2009, and will now depend on other revenue opportunities to cover their costs.

The CEO of Southwest, Gary Kelly reports that the airline will increase revenue by making some significant changes to the Southwest “Rapid Rewards” frequent flier program, and also by adding fees to tickets for children who are flying alone, people who are traveling with heavy bags, and for people traveling with pets. Still, the company’s significantly discounted fares are still attracting many passengers and helping to fill up planes.

Southwest Airlines has remained relatively profitable compared to its competitors during the economic slump, and the CEO believes this is because of the attractive no-baggage fee policy. Southwest does not have any intention of adding baggage fees like its competitors, although they are fully aware the competition has made millions of dollars in revenue from increased baggage fees alone.

Southwest Airlines expects capacity in 2010 to be about the same as 2009, which was down approximately 5 percent compared to 2008. The airline has also made attempts to balance out its losses by taking away unprofitable routes and making other adjustments to its operations. The airline’s shares, however, fell 6.3 percent in October 2009, but rose about 37 percent since July 15, as of October 15, 2009.