Why airlines are raising baggage fees — and charging you more at the airport

Why airlines are raising baggage fees — and charging you more at the airport
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Why airlines are raising baggage fees — and charging you more at the airport

Rising Baggage Fees: Airlines’ Strategy Unveiled

Airlines such as United Airlines, American Airlines, and JetBlue Airways have recently hiked their prices for checked baggage. However, the amount you pay hinges on when you opt for the service.

Fee Disparities Based on Timing

These carriers now charge higher fees for bags checked at the airport or close to departure compared to those paid for online in advance. The intention is to prompt customers to pre-pay for baggage, a measure believed to streamline check-in procedures and expedite travelers’ passage to their gates.

Why airlines are raising baggage fees — and charging you more at the airport
Why airlines are raising baggage fees — and charging you more at the airport

American Airlines’ Fee Structure Unveiled

American Airlines, in a move echoing its counterparts, increased its checked bag fees after a lapse of over five years. Employing a two-tiered pricing system, American now levies $35 for checking a first bag online in advance for domestic flights, compared to $40 if processed at the airport. This marks a rise from the previous $30 fee for either option.

Exceptions and Adjustments

Certain categories of travelers, such as those with specific airline rewards credit cards, top-tier class passengers, or elite frequent flyer status, are exempt from these fees, often receiving at least one free checked bag on domestic or short international flights. American Airlines is also reducing fees for slightly overweight bags, aiming to prevent last-minute adjustments at the airport.

The Incentive of Advanced Payments: A Strategic Move

The strategy behind lower fees for advance payments is to afford airline staff more time to assist travelers who require additional support during their journeys. This tactic mirrors the approach of ultra-low-cost airlines and aims to incentivize passengers to handle transactions beforehand, benefiting both customers and airlines.

Reflection of Customer Behavior

According to Frontier Airlines CEO Barry Biffle, most travelers opt to pay baggage fees in advance, reflecting the convenience and efficiency of this approach. This suggests a trend towards advanced payments, aligning with airlines’ strategic objectives and passenger preferences.

United’s Bag Fee Increase

In 2020, United Airlines initiated the practice of charging customers more for paying for checked bags at the airport.

Recent Adjustment

On Friday, the carrier announced an additional increase in bag fees by $5 for most flights in North America. This brings the fee to $35 if customers prepay online at least 24 hours before their flight, or $40 if paid otherwise. The new rates will apply to bookings made on Feb. 24 onwards. Additionally, the fee for a second checked bag will be $50, or $45 if paid at least 24 hours in advance.

Motivation Behind Baggage Fee Hikes

Luggage fees represent a significant source of revenue for airlines. According to the Transportation Department’s latest data, U.S. airlines amassed over $5.4 billion from baggage fees in the first nine months of 2023, marking a surge of over 25% from the same period in 2019.

Justification by Airlines

Airlines justify these increases by citing higher costs, particularly in labor and fuel, which constitute their major expenses. JetBlue, commenting on its recent fee adjustments, stated, “While we don’t like increasing fees, it’s one step we are taking to get our company back to profitability and cover the increased costs of transporting bags.” The airline further explained that by adjusting fees for services utilized by specific customers, they can maintain low base fares and continue offering free amenities like seatback TVs and high-speed Wi-Fi to all passengers.

Southwest Airlines: Setting the Standard

Southwest Airlines diverges from the norm among major U.S. airlines by offering customers the convenience of checking two bags for free. Chief Operating Officer Andrew Watterson reassures that this customer-friendly policy will remain steadfast.

Cost Efficiency Perspective

Watterson emphasizes in an interview that the airline’s operational costs do not align with the steep fees charged by other carriers for checked bags. While passengers on competing airlines often resort to carrying on their bags to evade fees, Watterson points out the potential disruption this can cause to operations, especially for Southwest. The airline’s stringent goal is to turn aircraft around for the next flight within 45 minutes, even less for its smaller Boeing planes.

Operational Streamlining: The Check-in Advantage

Encouraging passengers to check their bags rather than carry them aboard contributes significantly to operational efficiency, according to Watterson. By minimizing the influx of carry-on baggage, Southwest aims to maintain a seamless operation, ensuring timely departures and arrivals.

Building Customer Loyalty

Watterson underscores the dual benefits of this strategy: not only does it enhance operational efficiency, but it also fosters customer loyalty. He emphasizes the importance of repeat business, asserting that when airlines treat customers well and implement fair policies, they are more likely to return for future travel.

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