Article: Checked Bag Fees Cost US Airlines Millions

[AFF Editor]

Checked Bag Fees Cost US Airlines Millions is an article written by the AFF editorial team:

Checked Bag Fees Cost US Airlines Millions of Dollars

In 2008, United Airlines started charging Economy class passengers a small fee to check in a second bag on domestic flights.

www.australianfrequentflyer.com.au

You can leave a comment or discuss this topic below.

 

[dajop]

The airlines that charge for checked luggage that seem to have fastest boarding are the ones that also charge for carry on (that’s bigger than a medium sized backpack). The likes of Easyjet and Ryanair. What’s more they manage the demand for overhead locker space by increasing prices the fuller it gets (or is likely to get). This model understandably is probably not popular in the US.

 

[CaptJCool]

False economy without thinking about what PAX actually need to bring if they’re flying.

Take No Luggage ?
That’s the idiocy of thinking about leisure travellers

So if you do surcharge like those pesky CC surcharges, it reminds rational people how poorly you are treating them.

 

[MELso]

The checked bag fees have the 'advantage' for the airlines of avoiding federal airline excise in the US (7.5%) applicable to the ticket itself, as well as allowing the advertising of lower headline prices.

But if the checked bag fee is $45, the excise would be $3.38. Multiply that by 180 and the maximum revenue on a typical narrowbody 737/A320 flight is just over $600. (Of course, this ignores people with status or the right credit card able to check a bag for free, and those that would go HLO anyway.) I guess someone has determined that the (at most) $600 in excise avoided by the fees and the extra custom generated by low headline prices (compared to just charging $45 more for each ticket) is more than the cost of keeping the plane on the ground for an extra 5-10 minutes. Or at least, you'd hope so.

 

[RooFlyer]

@Mattg your first para

In 2008, United Airlines started charging Economy passengers a small fee to check in a second bag on domestic flights. The other US airlines quickly realised that they could increase their revenue by doing the same. Within just months, every legacy carrier in the United States had extended this to charging for all checked luggage.

... does that all mean including biz and first class domestic? Do the fees extend to international as well as domestic? Economy pax with AA/UA or OW/*A status?

A useful follow-on article would be to document how Qantas FF status holders can or cannot avoid the AA checked baggage fees if travelling with OW status, or say UA pax holding AC or SQ status; and the cases of QFF status holders travelling on AA flights tagged to an international entry Vs stand along USA domestic flights.

I recently had a Finnair RTW going westwards which landed me in Miami and resumed from DFW. I flew on AA on a separate PNR (but all on the one 'ticket' issued by my TA) from CTG (Colombia) - xMIA - DFW on my QFF Plat status and am pretty certain there were no checked baggage fees.

 

[justinbrett]

I really like the AA boarding process. It’s organised and consistent. The new charges to add extra groups seems like a good idea, especially moving F/J before group 1 as there were far many people in Group 1 before.

I think there is some merit in your theories but what hasn’t been accounted for is the fuel savings of fewer checked bags and the extra revenue from freight.

I’m also assuming Southwest has the data and as they’ve chosen to charge for bags and preferred seating, they’ve worked out this is still a money maker for them.

... does that all mean including biz and first class domestic? Do the fees extend to international as well as domestic? Economy pax with AA/UA or OW/*A status?

J/F and OWR and above still get free bags on all AA. Some international is free for all depending on destination, which includes Australia.

UA is J/F and *A Gold that gets it free. Same for DL and equivalent Slyteam status.

 

[Mattg]

@Mattg your first para

In 2008, United Airlines started charging Economy passengers a small fee to check in a second bag on domestic flights. The other US airlines quickly realised that they could increase their revenue by doing the same. Within just months, every legacy carrier in the United States had extended this to charging for all checked luggage.

... does that all mean including biz and first class domestic? Do the fees extend to international as well as domestic? Economy pax with AA/UA or OW/*A status?

What I meant here is that they soon started charging for the first bag as well as the second one, for those who didn't get a fee waiver. Have edited the article. The fee didn't and still doesn't apply if you have a first class ticket or status.

 

[MEL_Traveller]

They could improve turn-around times, but do they have the slots to operate more flights even if they wanted to?

They could of course have smaller fleets, but that ship has now sailed. They have the planes, and many of them aren’t brand new.

Plus until recently they didn’t pay flight attendants until the doors were closed… so you could start boarding that far in advance with little additional costs.

They might be losing millions by the checked bag fee, but they’re making billions. Plus all the indirect earning through pax getting airline-branded credit cards which include a bag for free. While peo0e use the card that’s generating income for the airline through points sales.

While airlines might have reduced turn-around times in Australia… it clearly doesn’t work for VA. their flights are often late. Scheduling a 25 minute turn doesn’t work either.

Interesting to look at the old time tables for the late 60s…international QF flights would touch down in Perth and be in their way to Sydney just 45 mins later… that’s refuelling and baggage plus pax handling for a 707.

edited to fix spelling

 

[OZDUCK]

They could improve turn-around times, but do they have the slots to operate more flights even if they wanted to?

They could of course have smaller fleets, but that ship has now sailed. They have the planes, and many of them aren’t brand new.

Plus until recently they didn’t pay flight attendants until the doors were closed… so you could start boarding that far in advance with little additional costs.

They might be losing millions by the checked bag fee, but they’re making billions. Plus all the indirect earning through pax getting airline-branded credit cards which include a bag for free. While peo0e use the card that’s generating income for the airline through points sales.

While airlines might have reduced turn-around times in Australia… it clearly doesn’t work for VA. their flights are often late. Scheduling a 25 minute turn doesn’t work either.

Interesting to look at the old time tables for the late 60s…international QF flights would touch down in Perth and be in their way to Sydney just 45 mins later… that’s refuelling and baggage plus lax handling for a 707.

Yes when I worked at Perth Airport in the 1970's turnaround was expected to be under an hour. The difference, I believe, is probably down to staffing levels. But to be fair baggage handling was also simpler. Straight out of the hold onto a cart and then driven maybe 100 metres and dropped onto a simple oval conveyer belt just outside the baggage hall. No change in elevation or direction.