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Southwest Airlines’ signature tagline Bags Fly Free seems to be a thing of the past. Since its inception nearly 60 years ago, the airline has offered customers two complimentary checked bags as part of its pitch to distinguish it from competitors. But by this summer, it seems, Southwest will have to replace its oft-repeated slogan with a new one: bags fly for an added fee. Thats because any customers who are not members of Southwests frequent fliers programs or traveling in an upgraded seat will have to pay for their checked bags, starting with flights booked after May 28, according to a company press release. The airline did not provide specific rates for the new fees. Southwest also announced that flight credits will now expire after one year, walking back a policy put in place during the pandemic that allowed customers to keep their credits indefinitely. So far, the reaction to the new bag fees has been overwhelmingly negative. But, when observed alongside all of the other changes that Southwest has made to its programming over the past several months, its not exactly surprising. As of last month, shares of Southwest’s stock (NYSE: LUV) were down nearly 50% compared to five years ago. In an effort to appease its investors, Southwest has been on a mission to aggressively cut costs and implement a slew of added fees. Those cost-saving policy changes appear to jettison all of the elements that once made Southwest’s brand identity distinct. Turbulence for Southwest’s leadership From its inception in 1966, Southwest has cultivated a reputation as a quirky, lower-cost carrier with unique perks and an equitable approach to seating that endeared it to a base of loyal fans. However, those perks have been first on the companys chopping block as its reduced costs and implemented more Spirit-esque fees to drive sales. Over the past several months, Southwest has been rolling out an overhaul intended to catch up with competitors like Delta and United by reviving its shrinking profits and the downward trajectory of its stock. The breakneck pace of this overhaul has been egged on by hedge fund Elliott Investment Management, which owns a $1.9 billion minority stake in the company and has frequently publicly criticized Southwest for not adapting to the times and cutting costs. Southwest kicked off 2024 by debuting an interior cabin redesign, which is set hit runways this year. While the company argued that the revamped look was made with comfort in mind, customers pointed out that the seating looked like a major downgrademainly because, based on renderings provided by the company, the seats looked almost comically thin and rigid. TikTok users dubbed them lawn chairs and Ozempic seats. But, as it turns out, the lackluster seating was only a harbinger of the airlines larger plans to come. A once-quirky airline joins a sea of corporate sameness Southwest has spent the last few months nixing its most distinctive offerings. In September, the company announced that it would slash its open seating policy, one of its characteristic brand traits, which allowed every Southwest passenger to choose their own seat when boarding. At the same time, the company revealed that it would swap a third of its seats for more premium chairs, which come with more legroom, faster Wi-Fi, and larger overhead binsfor an added cost, of course. This new seating policy on its own was enough to cause Fast Company to ask whether Southwest was losing its Southwest-ness by sacrificing its unfussy reputation for greater profits. Even during the September investor call announcing the end of open seating, though, Southwest executives argued that ending the signature Bags Fly Free plan would be a destructive step too far, adding that they estimated charging bag fees would bring in about $1.5 billion per year but cost another $1.8 billion in lost business. The program was so central to Southwests identity that the company trademarked the Bags Fly Free slogan and has a whole backlog of ads, going back decades, that center on the promise (see this spot from 2009 and this one from 2023.) Now, Southwest is scrapping the last vestige of its recognizable brand identity by backtracking on free bags. The backlash from fans has been swift. On X, one recent tweet with 4,000 likes and counting reads, If Southwest Airlines had assembled a focus group and asked them what’s the stupidest thing that we could do to ruin our company, this is what they would have come up with. Another tweet with 11,000 likes adds, Is Southwest aware that now people are no longer incentivized to fly with them?? Popular opinion may have turned against the airline, but the market seems to approve. As of this writing, Southwest stock is up around 9%. The market also responded positively last month when the airline announced that it planned to lay off 15% of its corporate workforce in another cost-cutting measure. As Southwest continues to whittle away the perks it once touted, its become just another set of wings in an industr full of likeminded competitors.
Category:
E-Commerce
More than three million developers are using OpenAIs APIs as shorthand code to infuse apps and websites with an engine of advanced AI. And today, the companys most popular API, called Chat Completions, is getting a significant sequel called Responses. Eight months in development, it will vastly expand upon and simplify the experience of plugging into OpenAI. For developers, Responses will mean using less code to stack more complex questions to the AI. A hundred lines of code will turn into just three, as the company is courting a wider set of developers who don’t consider themselves LLM experts. For consumers, it will mean youll soon be interacting with AI thats faster, more fluid in using forms of media other than text, and more capable of taking more steps on your behalf. Completions were very much designed in a world where you could only put text into it, and you could only get text out of it. But now we have models that can do work across multiple mediums. We can put images in, we can get audio out of the model, and [users] can speak to the model in real time and have it speak to you back, says Steve Coffey, an engineer at OpenAI. [Completions] is just like the wrong tool for the job…so Responses was designed from the ground up. What is OpenAIs new Responses API update? APIs are basically the software gateways to use features from a service or platform inside your own. And to OpenAI, its APIs are as carefully designed as any producteven if we dont tend to consider APIs as designed objects. The iPhone has APIs for apps using its camera and accelerometers, for instance, while Stripes APIs make it possible for websites and apps to take paymentsand in each case, the ease of integrating these APIs has been vital to courting developers and growing a business. OpenAI created the modern API for AI in 2020 (and Chat Completions in 2023) so developers could plug into its AI platform. Its competitors have since copied OpenAIs approach to be something of an informal standard across the industry. Thousands of apps, ranging from Perplexity (an AI search engine) to Harvey (an AI for lawyers), currently integrate OpenAI APIs. Today, OpenAI offers a few different APIs, including one that generates images for Dall-E and another that exclusively works to summarize or write text from scratch. For this release, OpenAI is focusing on Responses, the evolution of its Chat Completion APIthe companys popular way that app developers can plug into the core conversational technology behind ChatGPT. The way the Chat Completions was designed, developers could only send one query in text at a time, and get a single answer in text back. Practically speaking, that meant complicated questions could take several steps, and each individual new question took time, introducing more latency. Now, a developer plugs strings of code into the Responses API, crossed with natural language queries that developers can use that are more or less the way you or I would talk to ChatGPT. (A long user manual helps developers understand what they can and cant do.) OpenAI’s API will offer multi turn conversations that understand context and conversational floweven when you mix in multimedia like images and, soon to arrive, voice/sound. Responses can also juggle several processes at once, because with a single line of code, you can connect Tools hosted by OpenAI into this process. These tools will include a web search (so OpenAIs responses can be grounded in more real time data), a code interpreter to write and test code, and a file search to analyze and summarize files. The new API will also let developers connect to OperatorOpenAIs agentic tool that can analyze screens and actually take actions on the users behalfand comes with a new kit of software that helps developers juggle multiple AI agents at the same time. As the company explains, building APIs requires forecasting years ahead at the functions developers may want, and if you squint, its not hard to deconstruct OpenAIs own thesis on the future lurking in the feature set. The API has vastly expanded upon whats possible to do when you plug into OpenAI as a developerembracing fuzzy inputs of multimedia, integrating information so responses are current, and perhaps most notable of all, acting on behalf of the user to save them time and effort. I’m very excited for this year because of the agentic behavior that our models will unlock the model is taking multiple steps on its own volition and giving you an answer, says Atty Eleti, an engineer at OpenAI. On the far end, [it makes way for] AI engineers, AI designers, AI auditors, AI accountants. Little junior interns that you can instruct and operate and ask them to go up and do these things. And I think we’re on the cusp of that becoming a very tangible reality. Still, these long-term possibilities are grounded in immediate efficiencies. The API updates mean that a simple question, whats the weather in San Francisco, goes from taking a hundred lines of code to just three. Adding all of the aforementioned tools requires just one line of code. This means that coding AI apps should be faster for developers. And because many queries hit OpenAI’s servers all at once, responses should come faster for end users. [Image: OpenAI] The challenge of bringing developers along Like any tool, APIs have to be designed for ease of use. They are not ust about coding capabilities, the OpenAI team argues, but about designing clarity and possibility. The education ladder of an API is something that has to be very consciously designed, because our target audience is not people who know how AI works or how LLMs work, says Eleti. And so we introduce them to AI in a sort of a ladder way, where you do a bit of work and you get some reward out of it. You do a bit more work, you understand some more concepts, and then over time, you can graduate to the more complex functionality. OpenAI gives this instructive feedback to developers through their own mistakes. Whenever it generates errors, OpenAI tries to explain what went wrong in plain language, so the developer can actually understand how to improve their technique. The OpenAI team believes that such feedback, coupled with autocomplete coding tools, should make Responses easy for developers to learn. I think that really good APIs sort of allow you to start off with the gas pedal in the steering wheel and graduate slowly to the airplane cockpit by exposing more and more functionality in the form of knobs, in the form of like settings and these other things that are hidden from you first, but exposed over time, says Coffey. The tricky part of updating an API, however, is not just making it self-explanatory. The API also needs to be backwards compatible because software thats already been built to connect to OpenAI cant suddenly go dark after an update. So Responses is backwards compatible with software built upon Chat Completions. Furthermore, the Completions API itself will continue working as it always has. OpenAI will continue to support it into the future, offering updates that put Completions as close to feature parity with Responses as it can. (But to use those nifty tools, youll need to graduate to Responses.) Over time, the OpenAI API team bets that most of its developers will land on Responses, given the extra capabilities and that it will be price-equivalent to run. Assuming that OpenAI has bet on the right future, AI software is about to become faster, more capable, and more proactive than anything weve seen to date.
Category:
E-Commerce
Deals are my art form, Donald Trump boasted in his signature book, 1987s The Art of the Deal. Other people paint beautifully on canvas or write wonderful poetry. I like making deals, preferably big deals. That’s how I get my kicks. In the second term of his presidency, Trump is still getting his kicks quite often. His approach to deal-making, however, no longer resembles an artformif it ever didso much as it does a game of Russian roulette: erratic, overconfident, and mutually destructive. Through his whiplash-inducing tariff flip-flops and shabby treatment of Ukraine, Trump is demonstrating how his idea of a good deal differs from the rest of the worlds. Hes also assuring other leaders theyd do well to avoid sidling up to his negotiation table unless they absolutely have to. While many leaders surely have their own little idiosyncrasies around what constitutes a good deal, there seems to be some general consensus in the business world. The business book canon is brimming with tomes like William Urys Getting to Yes, which emphasize the importance of mutual respect and collaboration in forging win-win outcomes, while Harvard Law School’s Program on Negotiation prizes clarity and fairness. And beyond the realm of pure business, the last century of diplomacy was built on deals that were fair and equitable, and where all parties stood to gain something. Think of the Marshall Plan in 1948, when the U.S. provided over $13 billion to help post-WWII Europe rebuild itselfwith the U.S. gaining strong trade partners, political allies, and immeasurable goodwill in return. Or the Camp David Accords in 1978, where Israel got security provisions, Egypt reclaimed some of its lost territory, and the U.S. burnished its ties with both countries in brokering the deal. These mutually beneficial moments from the highlight reel of international history are about as close to universally recognized good deals as they come. Its unclear, however, if Trump would see them that way. “You hear lots of people say that a great deal is when both sides win,” the president wrote in his 2007 book, Think Big and Kick Ass. “That is a bunch of crap. In a great deal, you winnot the other side. You crush the opponent and come away with something better for yourself.” In Trumps philosophy, deals are evidently a zero-sum game with clear winners and losers and no set rules. Forged in the fires of New York City real estate in the 1980s, this outlook ultimately shaped Trumps first term as president, where he deployed extortion-like tactics to beef up his bargaining position. Sometimes he prevailed; other times, he didnt. But he almost always operated by creating a potential crisis and dangling a solution advantageous only to himself. In 2018, he was able to forge the United States Mexico Canada Agreement (USMCA), a revised version of the North American Free Trade Agreement (NAFTA), only by threatening to withdraw the U.S. from NAFTA, or purge Canada from it. Later that year, after the Senate unanimously passed a stopgap bill to continue funding the government, Trump refused to get behind it unless the bill included $5.7 billion for his border wall. In this case, the threatened crisis came to pass, resulting in the longest government shutdown in U.S. history with no additional border funding. And perhaps the most notorious deal from Trumps first term came during fall of 2019, when he paused a promised $400 million in military aid to Ukraine, allegedly to pressure the country into investigating Joe Biden’s son, Hunter. The deal was technically a success, in that Ukraine did indeed pursue such an investigation, but the victory was short-lived, in that it eventually earned Trump his first of two impeachments. Trumps coercive approach to deal-making was a decidedly mixed bag in his first term. Any hopes that he might rein in his impulses and apply a more mutually beneficial touch the second time around, however, vanished immediately after Januarys inauguration. How the rest of the world would respond to Trumps extractive tactics, now that the surprise factor is long gone and unpredictability is just baked into the equation, remains an open question. Ukraine has very little leverage, for instance, in ongoing negotiations with the Trump White House to end three years of Russian-led war. During an ill-fated Oval Office meeting on February 28, which had been expected to firm up plans for peace talks between Ukraine and Russia, President Volodymyr Zelenskyy seemed caught off guard by Trump and JD Vances demands for a display of gratitude. (Its unclear now whether the meeting was indeed meant to advance negotiations, or if it was intended as more of a planned humiliation ritual.) In the aftermath, Trump paused aid to Ukraine, along with intelligence-sharing. He will reportedly resume both, and broker peace talks with an apparently blameless Russia, once Zelenskyy not only agrees to share minerals with the U.S., but undergoes an attitude adjustment. (Zelenskyy seems to be relenting.) Iran, on the other hand, is calling Trumps bluff. The president reportedly sent a letter to Iran’s Supreme Leader Ayatollah Ali Khamenei last week, threatening military action if the republic refuses to negotiate over Irans nuclear program. “There are two ways Iran can be handled, Trump told Fox Business on Friday, militarily or you make a deal.” So far, Khameni refuses to make a deal. “The insistence of some bullying governments to negotiate is not to solve problems, but to impose their own expectations,” the leader said, according to Irans state media. “The Islamic Republic of Iran will definitely not accept their expectations.” The ball is now back in Trumps court to either follow through with a military attack on Irannot likely a popular option in Congress at this particular momentor let his empty threat hang in the air. For now, he seems content to do the latter. One form of deal-making where Trump has produced unquestionable results in his second term, though, is through his liberal use of tariffs. Not that those results have all been positive, exactly. Trump scored an early win through using tariffs as a cudgel, just days after his inauguration. On January 26, Colombia objected to accepting deported migrants from the U.S. that were flown in on military planes, shackled in handcuffs. In response, Trump threatened the country with 25% tariffs. Colombia quickly backed down. Although the countrys objection resulted in better treatment for its deported migrants, the standoff was viewed by many as an unequivocal success for Trumps tariffs. It would prove to be the last one to date. Trump initially promised that 25% tariffs on Canada and Mexico would begin on February 4. After the stock market appeared spooked in response, though, and both countries tentatively agreed to beef up border security, he delayed the tariffs for a month. After briefly musing that he might further delay the duties, until April 2, Trump went ahead with applying 25% tariffs against Mexico, Canada, and China on March 4. Since then, amid pandemonium at the stock market, he has delayed some of these tariffs until April 2, but confusingly left others in place. (Even more confusing, he has placed tariffs on steel and aluminum imports, which automakers depend on, and increased them again on Tuesday, while also attempting to minimize disruption to the auto industry with an executive order.) Meanwhile, Canada has not paused its retaliatory tariffs, and neither has China, who seems completely unfazed by Trumps trade war. These deals seem less like the five-dimensional chess moves of a savvy tactician than the arbitrary flailing of a leader drunk on power and an expectation of always getting his way. He has reserved a special animosity toward Canada, framing the trade war as an effort to force the country into becoming the U.S.s 51st state, despite very little stateside enthusiasm for the idea. Whatever meager concessions the U.S. has gained in border security from this multi-front trade war are vastly dwarfed by the economic turmoil of a spooked stock market, fears of an approaching recession, and global animosity toward the U.S. Trump may see deal-making as a show of power, but his deals in 2025 seem to only show the power of indiscriminate destruction. Forget mutually beneficial; Trump now seems all too willing to make moves that benefit no one. And if he keeps it up much longer, even some of his most ardent voters may soon conclude they got a raw deal.
Category:
E-Commerce
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