U.S. airlines collected a whopping $4.9 billion in baggage fees in 2018. That figure alone explains why these airlines will likely never offer complimentary checked bags again.
When American Airlines announced it would start charging for all checked bags in 2008, it could only have dreamed that a decade later it would be raking in over $1BN/year in checked baggage fees. World’s largest airline (by fleet size, revenue, and passengers carried) led the pack in 2018 with $1.22 billion in baggage fees.
Here’s the breakdown of checked baggage revenue (including checked carry-on bags) in 2018 for the 10 major carriers in the USA:
| Airline | Fees |
|---|---|
| American | $1.22 billion |
| United | $889 million |
| Delta | $788 million |
| Spirit | $638 million |
| Frontier | $366 million |
| JetBlue | $321 million |
| Alaska | $280 million |
| Allegiant | $220 million |
| Hawaiian | $85 million |
| Southwest | $50 million |
SOURCE: U.S. Bureau of Transportation Statistics
Not surprisingly, the there legacies led the way.
But even Southwest Airlines, which offers two free checked bags to each passenger, still made $50 million in fees. Charging for the first two bags would run counter to Southwest’s successful business model and cost it a lot of business, but I have to imagine that the temptation to capitalize on this untapped revenue stream is strong.
I’d like to think of myself as a consumer right’s advocate, especially on issues of fare transparency, post-purchase price increases, mistake fares, and unannounced devaluations. But while some are outraged over the numbers, I just shrug my shoulders. Airfare is widely affordable across the nation today and part of the reason it is because pricing is more a la carte than before. I don’t mind paying for bags and meals, when needed. These fees have kept a check on the rise of base airfare.
> Read More: Airfare Is Cheaper* Than Ever Before
CONCLUSION
$4.9 billion in checked baggage revenue is quite a figure. As the U.S. airline industry continues to boom, look for those numbers to expand in 2019.
Fair enough (pun intended).
But the two “free” Southwest bags are part of the fare. Every Southwest customer is paying for 2 “free” bags whether or not they actually check 2 bags (notice they don’t offer a rebate if you don’t check bags) AND Southwest gets a whipsaw when a customer purchases a ticket and then doesn’t check bags (because in additional to the higher fare, less bags means less weight, less fuel burned, faster turns etc.)
Would be interesting to see how much Southwest’s profits have gone up by increasing their fares (after most of their competition started charging for 1st and 2nd bags).
Lets be clear. Southwest fares are MUCH higher than they were when U.S carriers weren’t charging for 1st and 2nd bags. That’s transfarency.
P.S. Sill fly Southwest, just grumpy.
P.S.S. Great at (most) parties.
Grant – I totally agree. When other airlines started charging for bags, Southwest fares went up.
Don’t agree. For the places we fly to, SW is almost the cheapest.
Also keep in mind that baggage fees are not taxed the same way that airfare are. Thus if a carrier is going to collect $400 total from a passenger (airfare plus 2 bags, as an example), they keep more money by charging $350 for the fare and $50 for the bags than if they charged $400 all-in. This is why President Trump’s tax cuts are so important.
Interesting to see Delta about $100M behind united with a more lenient basic economy offering. We’ll have to wait and see if they are happy missing that revenue for years to come.
My thought exactly…..it’s just a matter of time before they all “wake-up” and jump on the American/United bandwagon. Frankly, it’s ridiculous not to allow carry-on even if sitting in minus economy plus or basic economy.
Interested statistics! I wonder what the breakdown would be if those fees in terms of % relating to forced gate checked bags due to exceeding the allowance. Passengers trying to sneak more onboard to avoid a fee.
Need to start charging for gate checked bags. Too many people are gaming the system and bogging down TSA check points.
Totally agree with you. It’s downright insane.
Cool story. If a third column could be added to this graph, showing total revenue, that’d help put each of these in perspective. That way we could calculate the percentage of revenue each airline generates via baggage fees.
Well, probably top earners could say that this policy is far. But for the regular blue collar, and they are the majority, the story is different. They have to shell out money that they don’t have a lot. A most of them only can do it once a year. Try to travel in economic if you are over 5’11 and tell me that the leg room is good. Not everyone can travel first class or get their companies paying for the flights.
I agree with those saying people bring the kitchen sink to the gate because of charging for checked bags. Some of the ‘backpacks’ I’ve seen can carry a dead moose.
The airlines in their frenzy for more profits have it backwards. These fees encourage passengers to carry on heavy and unwieldy baggage which immensely slows down the whole boarding process and is downright dangerous in case of an exit emergency. If instead, airlines charged fees to carry on burdensome luggage, passengers would be safer, as less people would go to trouble and pay for it. Disgusting how because of profits, how blinded these companies have become to practicality and safety.