Report: Airlines Made $33 Billion Last Year Charging For Checked Bags

Paying a fee to check a bag seems like an unnecessary added cost, especially when you have no choice — you need your luggage to travel with you.

And according to a new report, those baggage fees really add up for the biggest airlines that reported major earnings on the fees alone.

A study by ancillary revenue and travel industry specialists IdeaWorks suggests that, in 2023, the top 20 airlines in the world made $33 billion in baggage fees, up 15% from the same time last year when airlines made $29 billion in 2022.

Airlines surveyed include American Airlines, Delta, United, Southwest, Emirates, Etihad, and more.

“Consumers have reacted to bag fees by wanting to carry more bags into the cabin to avoid charges,” IdeaWorks said. “Travelers love the convenience of carry-ons and even load up the cabin on airlines that don’t charge for checked bags. For all airlines, from global network carriers to LCCs, this has become an operational challenge and customer pain point.”

Baggage fees include anything from fees charged to check a passenger’s luggage, fees for overweight or oversized bags, or other extraneous fees that passengers may incur when dealing with luggage.

The study also found that these airlines earned an overall total of $117.9 billion on extra fees across all categories, including paying for premium seat selection, loyalty programs on airlines, and purchasing additional snacks and beverages on board among others.

“Fees for checked baggage first started as an economic necessity for traditional airlines seeking relief from a dramatic jump in fuel prices during the oil shock of 2007 and 2008,” IdeaWorks said in its release. “Within a matter of months, major carriers in the US went from including 2 checked pieces with every fare, to charging for the first bag checked by travelers. Since then, fees for checked baggage have been adopted by airlines all over the world.”

The study comes on the heels of American Airlines announcing that it would be increasing its price of checked luggage for domestic passengers to $40 at the airport and $35 during online check-in, a 33% increase from the airline’s previous policy of $30 for checked luggage regardless of payment time.

“For the first time since 2018, American is adjusting bag fees for first and second checked bags for travel booked on or after Feb. 20,” American Airlines said in a statement.

Though prices vary depending on the airline, most domestic checked bag fees for a customer’s first bag range from $25 to $89, the higher end on discount airline Frontier Airlines with lower prices on JetBlue and United.

https://www.entrepreneur.com/business-news/airlines-made-33-billion-on-baggage-fees-in-2023-report/470197