NEW YORK (TheStreet) -- It doesn't matter to S&P Capital IQ airline analyst Jim Corridore that Southwest (LUV) CEO Gary Kelly opposes bag fees. Corridore said Southwest, like JetBlue (JBLU) , needs bag fees but for different reasons.
In a recent note, Corridore wrote that with Robin Hayes set to replace Dave Barger as CEO of JetBlue, "we think a new CEO will adopt more revenue generating policies including more seats on board and bag fees." Corridore maintains a "strong buy" on JetBlue shares.
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In an interview, Corridore added that Southwest should add bag fees too. In that, Corridore contradicted what Kelly told reporters at Southwest media day in Dallas on Sept. 8.
Asked whether Southwest might end its "Bags Fly Free" program, Kelly responded: "That debate's long ended.
"You see the results that we have, which are affirmed by all the research that we do in marketing that say if we charged for bags, the defection rate of our customers would be such that it would more than wipe out the bag fee revenue, and by close to $1 billion, which interestingly enough from a macro perspective, was about the market share value increase we got once the rest of the industry began starting for bags," Kelly said.
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