Discount airline’s shares rise as Jefferies analyst upgrades the stock, citing an earnings boost from luggage fees.

The decision by Southwest Airlines Co (NYSE: LUV) to introduce baggage fees is expected to significantly boost its profits, according to a Wall Street analyst.

Southwest Airlines has updated its checked bag policy, and passengers will start paying extra tomorrow. Southwest has long allowed passengers to bring a guaranteed free checked bag, but that is changing tomorrow as the airline adopts a new policy.