Southwest is Shaking Up Group Travel (Here's How Not to Get Burned)

So, our CEO sat down with the folks at the Southwest Airlines Group Desk during IMEX Americas. An hour later, he walked out with a look on his face that was one part "aha!" and two parts "uh oh."

The big news? Southwest is shaking up its group travel program — and not just a little. Starting in 2026, major changes are on the way that could impact your bottom line. Some updates are wins. Others? Not so much, especially if you’re not keeping a close eye on the fine print.

Let's dive into what's actually changing and how to keep your business from taking a hit.

The Three Big Changes Headed Your Way

Mark your calendars for January 27, 2026. That's when Southwest's new group program officially kicks off. Here's the rundown.

1. "Bags Fly Free®" Is Now "Bags Fly... for a Fee"

Remember Southwest's whole "Bags Fly Free®" thing? Yeah, about that. For group travelers, that legendary perk is heading off into the sunset.

Starting in 2026, your group's bags will need to pay their own way. Get ready for:

$35 for the first checked bag
$45 for the second checked bag

Sure, your fancy A-Listers might still get their freebies, but for the rest of your group, it's time to pony up. This means you’ve got to start baking those fees into your tour prices now, or get ready for some awkward conversations with your travelers.

2. Assigned Seating Is Here to Save Your Sanity

Let's all take a moment to rejoice. The mad, 24-hour dash to check in 100 people at once—praying to the Wi-Fi gods that your system doesn't crash—is finally over. Hallelujah!

Southwest is rolling out assigned seating for group bookings. You can actually assign seats when you book, meaning no more "Hunger Games" style boarding. Your tour leaders will thank you, and families can actually sit together without having to bribe someone with a bag of pretzels.

The only thing to watch out for? Seats might be tied to fare class, so make sure you know what you're getting before you promise everyone a window seat.

3. The New Deposit Rules Are... Spicy

Alright, this is the part where you'll want to stop scrolling and pay close attention. The new deposit and reduction rules are where things get tricky.

Say Goodbye to the $50 Fee: Deposits are jumping to a whopping 25% of the total airfare.
The 10% Cliff: You get a one-time chance to reduce your seat count by up to 10%. If you drop seats before paying the deposit, you're fine. But once that deposit is paid, your number is locked. If even one more person drops out after that... poof. Southwest can cancel your entire contract and all previous deposits are nonrefundable. No joke.

Forget that old, cushy "utilization buffer." The new rule is rigid and unforgiving. It's like playing Jenga, but with thousands of dollars of your company's travel budget.

A Real-World Example: The $8,450 Oopsie

Let's do some quick and slightly terrifying math. Say you book 50 seats at $500 a pop. That's a cool $25,000.

You put down your $6,250 deposit (25%).
Your 10% safety net lets you drop 5 passengers. All good so far.
Then, a wild 6th person cancels. It happens. People are flaky.

Boom. You just fell off the 10% cliff. Southwest can cancel your contract, keep your $6,250, and leave you scrambling to rebook 44 people at last-minute prices (let's say $550 now).

Your total loss compared to your original plan? A painful $8,450. That’s not just a sting; that’s your entire profit margin getting vaporized because one extra person decided to stay home.

The Rise of the "Ghost Seat"

This has led to a bizarre, but weirdly logical, strategy: buying "ghost seats." Yes, you read that right. Tour operators are literally buying a plane ticket for a fake person—let's call him "Mr. Nobody"—just to stay above that 10% threshold. It's ridiculous, but when it's cheaper than losing your deposit, what else are you going to do?

How to Avoid Buying Tickets for Ghosts

Don't Jump the Gun. Hold off on booking with Southwest until your tour is locked, loaded, and fully paid for. If you're still selling spots, maybe give Delta, United, or American a call—they're a bit more chill about changes.
Play "What If?" With Your Numbers. Before you sign anything, ask yourself: what happens if 15% of my group bails? If the answer makes you sweat, book fewer seats.
Be Upfront About Bags. Add baggage fees to your tour price from the get-go. "Airfare plus baggage" is the new reality. Rip the Band-Aid off early.
Phone a Friend (Like Us). Group air contracts are a minefield of jargon and traps. Having an expert in your corner who can spot a bad clause from a mile away isn't just smart; it's essential.

This Is Where We Shamelessly Plug AllFly

Honestly, this stuff is our bread and butter. At AllFly, we handle the headaches of group air contracts so you can focus on running amazing tours (and not on buying tickets for imaginary people). We'll negotiate the tricky stuff, manage the details, and help you navigate these new rules without breaking a sweat.

And the best part? It doesn't cost you a dime.

So if you'd rather skip the contract-induced nightmares, give us a shout. We've got your back.

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