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Wall Street Again Calls on Southwest Airlines to Impose Bag Fees

Southwest Airlines (LUV) may be the most financially successful airline in U.S. history but for the moment it is in Wall Street's crosshairs, which means that analysts once again question its "bags fly free" policy.

Wall Street didn't like the carrier's second-quarter earnings report, which missed estimates, or CEO Gary Kelly's refusal to rush to cut capacity, even though the carrier warned that it expects revenue per available seat mile to fall by as much as 4% in the current quarter.

Southwest shares fell 11% to $37.22 on July 21, the day the carrier reported second-quarter earnings. On Monday, shares closed at $37.04 and are down 14% year to date.

Also Monday, the unions that represent Southwest's pilots and mechanics called for Kelly to step down, saying the airline spends too...