I'm surprised nobody has made the following observation. Isn't one of SWA's major strengths the fact that they don't charge for bags? That has been a major strength for them, if Delta thinks SWA is making major inroads in ATL, what's to stop DAL from doing the same? Given the same free bags deal on DAL I'm sure SWA would have a much more difficult time competing. People fly LCC's because of the perception they are getting a deal, if that goes away, I would think people prefer the full service airlines if the price is the same.
SWA was doing just fine before the "bags fly free" campaign. I doubt they'll have any problems if DAL were to get rid of bag fees. DAL would sure lose a ton of revenue, though.