5 outrageous luggage fee myths the airlines want you to believe

luggageHas the airline industry won the luggage fee war?

Consider the following facts:

• Airlines earned $566 million from checked baggage fees in the first quarter, according to the Bureau of Transportation Statistics. That’s more than four times as much as it collected for the same period a year before.

• Air carriers have publicly declared that passengers accept the fees. Only a few brave travel pundits are challenging those claims, but it appears no one is listening to them.

• Far from backing down, airlines are now raising the baggage fees. The latest is American Airlines, which famously introduced the idea of a $15 fee for the first checked bag. Uh, make that $20.

But a key to this devastatingly successful PR campaign is the mass acceptance of certain statements that aren’t entirely accurate. The airline industry as a whole wants us to embrace the following myths about checked luggage fees:

1. “We need to offset high energy prices.”

That may have swayed some passengers when oil was at $125 a barrel, a price that American Airlines’ chief executive Gerard Arpey complained the industry was “not built to withstand.” But oil is trading at around $70 a barrel today. Not exactly a bargain, but the airline industry is still flying, thanks very much.

2. “You’re only paying for what you use.”

Another flawed argument used by airlines and airline apologists is that the first-bag fee allows travelers to only pay for what they use. Oh really? There are lots of amenities that are considered a part of the airline ticket that don’t get used by every passenger, including a waiting area at the gate, beverage service, restrooms and those compelling in-flight magazines. By that logic, we should begin to “unbundle” those too.

3. “If we added a free checked bag, we’d have to raise fares by $15.”

That’s highly unlikely. Remember, none of the airlines lowered their fares by $15 across the board when they added the first checked-bag fee. Fact is, airlines don’t control their fares — we do. Fluctuations of only a few dollars are enough to drive us away — or send us to our computers to book. And airlines know it. If they allowed us to check our first bag at no extra cost, there would be no fare increase.

4. “The government says it’s OK.”

If the government were doing its job, that shouldn’t be true. The Transportation Department has the authority to tell the airlines to stop this a la carte fee nonsense. But because of a pro-business attitude among rank-and-file regulators at the DOT, it isn’t going to budge on luggage fees. Even if it means misrepresenting a few facts along the way.

5. “You don’t want to subsidize someone else’s checked bags.”

That’s an argument I hear from a lot of business travelers who travel with just one carry-on bag: If airlines allowed a “free” checked bag, then those of us who carry only one bag would effectively subsidize the airfares of those who check a bag. That’s patently absurd, considering myth #3, and considering the fact that business travelers already pay fares that are an average of four times higher than leisure travelers. Bag or no bag, they’re subsidizing lower leisure fares. Maybe they should be protesting that instead.

(Photo: conallob/Flickr Creative Commons)

  • http://www.gwenmccauley.ca Gwen McCauley

    I think baggage surcharges and other nonsense being inflicted upon travelers is a sign of an industry in its death throes! After all, desperate times call for desperate measures.

    I have no clue what might rise up to replace air travel as we’ve known it for the past 40 years or so. But all the signs are there that in its current paradigm, the airline industry is dying a slow, agonizing death.

    Perhaps we are entering an age when we’ll know people who are traveling because they go around naked because the clothes they brought in their carry-on have worn out and they daren’t buy replacements because it will cost too much to get home!

    Sound ridiculous …not much more ridiculous than having to pay to take along stuff that has always been an accepted ‘norm’ for the air travel public.

    Gwen McCauley

  • David Z

    There are lots of amenities that are considered a part of the airline ticket that don’t get used by every passenger, including a waiting area at the gate, beverage service, restrooms and those compelling in-flight magazines. By that logic, we should begin to “unbundle” those too.

    I think Ryanair’s considering those. :)

  • MarkieA

    I love the statement that the traveling public has ACCEPTED the baggage fees. What else are we supposed to do? It’s like saying that the driving public ACCEPTED $4.00 per gallon gas not that long ago. I know, I know, you can express your displeasure by not flying, thereby FORCING the airlines to do away with these ridiculous fees. When was the last time that there was any successful concerted effort by the public to boycott anything? I certainly advocate the public’s right and ability to affect these types of things – although I don’t generally hold out much hope for success – but I just think it’s a riot when these spin-doctors try to make it look like the public is happily traipsing down the path of higher fees, hidden surcharges, etc. so, therefore, it’s acceptable to keep piling on.

  • http://twitter.com/bncoast Wesley

    I feel outraged! I live in Canada and I don’t think they’ve quite introduced these fees yet, but I’m sure they are coming.

  • Thomas H White

    5. “You don’t want to subsidize someone else’s checked bags.”

    For those who make that argument, couldn’t someone also argue that those who carry nothing subsidize those with carryon bags? Someone is paying for those overhead bins, the gate time it takes to load due to all those passengers filling the overhead bins, and the weight of the carry-ons themselves. Actually, who is paying me for the time I wait for the slow people putting their stuff in the bins. If we got rid of them wouldn’t plane boarding go much faster and turnaround time and industry profits would improve.

    For those who make that argument, aren’t children and smaller adults subsidizing those who weigh a little more? It does take more fuel to carry a full sized adult rather than a child.

    And, those fees they are charging for your carryon pets are more than offsetting additional fuel charges. Therefore, people with onboard pets are subsidizing everyone else. You can’t argue that the fee is offsetting the other customers’ discomfort in having a potentially allergic reaction as only the airlines see those fees.

    3. “If we added a free checked bag, we’d have to raise fares by $15.”

    Really? Did Southwest or the other airlines not charging this fee raise their fares by $15? I find that hard to believe when their fees are still below the “full service” airline fees. And, what is the part of “full service” still left on the “full service” airlines?

    You think it may be really a way to destroy the ability to easily comparison shop based on price? As of right now, we have to do a fare comparison and then go to each airline to see what fees they’ll add to arrive at a final price. Maybe, the online travel booking agencies should include an option for people to check which of the services they are going to use. Then, they could once again really compare the different airlines.

    In other words, I agree that these are specious arguments as are the other two.

    tom

  • Renee

    FLY SOUTHWEST.

    Problem solved.

  • Jake

    @David Z

    I read something recently (not sure if it was satire or not) about Ryanair polling their customers to find out the necessity of SEATS. Don’t think that would fly in the US with all of the regs, but certainly an interesting thought…

  • frostysnowman

    Everyone above makes such valid points! That nonsense about how we “accept” luggage fees when we have no choice (have you tried to say no to paying the bag fee at any airport? doesn’t work!). The ridiculousness of saying we don’t want to “subsidize” the carrying someone else’s bags. We’ve all been doing it since the airlines began! The way I look at it, all of my business trips help subsidize my own leisure travel, and if it also helps get a lower fare for someone of limited means to go see their sick grandma before she dies then that’s OK with me.

    And really, who would care if all the fares went up by $15? The airlines should have just done it from the beginning, with no announcement or fanfare, and we the consumers would never have been the wiser. I think they blew it on that one.

    I’d love to fly Southwest, but they don’t come into my local airport.

  • Aaron Gold

    Accepted? Hah! I refuse to pay baggage fees if I can avoid it, and the only reason I still fly American is that I have elite status and am exempt. If I ever lose my status, I plan to stop flying American (although, given their abysmal on-time record and the way the flights are always packed, I’m not sure why I still give them my business.) The baggage fee is what will lose me as a customer. Accepted? Yeah, right.

  • carver

    Lets deconstruct this

    Let’s dispense with the name calling. Just because someone doesn’t think that baggage fees are evil doesn’t make them an airline apologist. Let’s see if we can elevate the discussion.

    Baggage fees are a means of the airlines to increase profitability. There are a finite number of ways to increase profitability. 1) Raise prices, 2)Cut costs

    Baggage fees are a means of raising prices. No one disputes that. What those versed in economics appreciate about baggage fees is that they can be avoided, unlike an across the board raise in rates. It is analogous to those who ask for parking to be included in hotel room rates.

    In some cities where parking is cheap then that makes sense. However, in a place like New York or San Francisco where overnight parking easily runs $40 and up, its better to have it as a separate charge so that people have the option of comporting their behavior to avoid this charge.

  • MarkieA

    @Carver
    I think you missed one very important point of Chris’ original post. At least, what you SEEM to be inferring is that we have a choice of either paying $15 for extra bags, or paying an extra $15 added to the base price of the ticket. I think what everyone is saying is that the airlines didn’t lower the base ticket price by $15 when they added the extra-luggage fees, so the “unbundling” excuse is invalid. We’re now paying the original base price, PLUS $15. So, if you’re able to avoid the “extra” $15, you’re not paying any less than you did before the luggage fees. Sure, if they suddenly started charging for a whole list of amenities AND LOWER THE BASE AIRFARE, then your argument holds water. But if they don’t lower the base airfare, then they’re simply nickel-and-diming the flying public.

  • Jennifer (the other one)

    Am I the only one who doesn’t have a problem with this? It costs them money to handle and transport the bags (probably more than the bag fees), so why shouldn’t they charge for it? It would’ve been nice if they’d lowered fares by a corresponding amount across-the-board, but as private businesses, they have the right to structure their prices as they see fit. People who need an extra seat should pay for it, people who need/want first class amenities should pay for them, and people who want to check a bag (or two, or three) should pay for it. If they wanted to ‘unbundle’ other amenities, that would be fine, too. Keep in mind that the cost of checking the bag is about 10% (or less) of what it would cost to overnight a 50-lb parcel.

  • David Z

    Sure, if they suddenly started charging for a whole list of amenities AND LOWER THE BASE AIRFARE, then your argument holds water. But if they don’t lower the base airfare, then they’re simply nickel-and-diming the flying public

    Essentially that’s the big question here: did the airlines raise or lower their fares after starting to charge the baggage fee/s from airport to airport?

  • carver

    @MarkieA

    I appreciate your post, but no, I understood Chris’ perspective, it just disagree with it from an economic model for two reasons. The first is that it fails to distinguish between a positive and negative check-off, and second it fails to distinguish between dynamic and static pricing models. But economics aside, my point is that the airlines felt that they needed additional revenue. The baggage fee is a fare increase on some people. No doubt about it.

    However, from an economic perspective its valid because the fare increase falls on those who costs the airlines the most money, i.e. the infrequent fliers. Its the same economic perspective as overweight luggage fees, excessive luggage and telephone booking fees.

    Think of it this way. You and the airline are entering into a side agreement. You agree to certain behaviors which reduce the airlines costs, and in return you pay less than a similarly situated person who doesn’t act to reduce the airlines cost. Doesn’t that seem fair?

  • eileen

    AND, this is why I fly southwest. I don’t care where I sit, and I’m not being taken for a ride…

  • John

    This entire article is nonsense. The only reason that there are checked bag fees is because fares do not cover the cost of transporting someone. Consider that the time you get a roundtrip ticket from NYC to LAX for $200. Ideally, airline could just RAISE ticket prices to cover the cost of doing business. But, due to federal regulations regarding collusion, they can’t (that’s a topic for a separate discussion). Therefore, additional fees are one of the very few ways to bring in addtional revenue. People (like Chris) always whine about how flying is such a hassle and how it’s not what it used to be (“they couldn’t even serve us peanuts on that long flight”). However, the last time that flying was a “pleasure” where everything was included in the ticket price was when ticket prices were so high that most of the public couldn’t afford to fly. You’d pay $2,000 or a roundtrip transcon flight (which is more like $4,000 in today’s money). Now, someone will be flying something like MCO-ATL-SEA-ATL-MCO for $190 including taxes. Which would you prefer? $4,000 or $190 plus $20 each way to check a bag? Stop complaining already. Just because luggage was included int he ticket price before doesn’t mean that it still has to be. And suggesting government regulations on what a company can and can’t charge for? Don’t be an idiot Chris.

  • dee newman

    I am finding it quite convenient to take the train when traveling on either coast. With flight delays and cancellations not connected with “Acts of God’ it is very annoying to have to find a hotel or risk an overnight melt down in an airport..

    No tarmac nightmares either.,And it is pretty convenient to carry luggage.. The airplane food is not worth eating or paying for so it is a wash on a train.. Bring your own food.
    Haven’t tried this cross country because you have to change trains but if I wasn’t always on a tight schedule I would try this , as well..

  • Mike Murray

    WAKE UP! Southwest doesn’t charge for the first bag, or the second one either. Their flights are usually on time. They still give you a free soda or water. And a snack. If you are quicfk, you can have your pick of seats.

  • Colleen

    John, I’d like to take what you say one step further. I wish airlines would go back to charging higher fares. Yes, you read that right. Then fewer people would fly, fewer planes would crowd the airports, fewer people would crowd the terminals and the baggage claims, and airlines should be able to make some money and pay their employees a decent salary. I might actually get on a plane again. No, we are not rich, just middle class. But I would gladly pay double the going rates to travel like I did in the “olden days”. Right now, I just refuse to fly. I will be driving by myself from Texas to NJ (and back) this fall. It will cost more, take longer, and I will be much happier and much less stressed.

  • carver

    @colleen

    Of course, if airlines could raise prices to levels that were comparable to the “good old days” then the prices of other goods and services would rise as the transportation costs would increase.

  • MarkieA

    @carver

    This is the second time you’ve made the point that infrequent flyers cost the airline more money. I’m not an economics major, but neither am I totally clueless; but I don’t understand that statement. Please explain. In general, I have issue with economic theories; they’re just that, theories. Most of them assume perfect competition, which doesn’t exist.

    @ John

    All good points except for one annoying little hitch: Southwest isn’t nickel-and-diming the public like this and they’re making money.

  • John

    @MackieA

    You’re right about Southwest (I knew someone would bring that up…haha). However, Southwest has an entirely different business model that the legacies which allows them to keep their costs down. For example, they have some of the lowest labor rates in the industry and a common fleet type. This alone saves them countless amounts of money. They also successfully hedged against oil (something that other airlines couldn’t do due to not having enough collateral/capital) for which they reaped (and still do reap) huge benefits.

    The problem with the legacies is that they can’t control their labor costs due to antiquated union regulations where basically the employees get to decide what the company pays them at the detriment of the company itself. Also Southwest’s different business model (the one that allows them to have lower costs) has disadvantages: they don’t fly internationally, they don’t really fly transcon, they don’t fly to small airports mostly, they don’t have agreements with other airlines (i.e. you can’t be protected on another carrier in case of an irregularity), they’re not part of an alliance, etc. Try redeeming Southwest miles for a round trip from Tulsa to Bankgok or New York to Buenos Aires.

    @Colleen

    You’re right to a certain extent I think. Higher fares would definitely present all the advantages you mentioned. However, it would also have the detriment of preventing anyone but the very elite from flying. In my opinion, I’ll put up with the delays, the checked bag fees, the worse customer service if it means that I can get a last minute ticket from LAX to Washington for $250 round trip. I think that the best solution is to let the market forces play themselves out. In other words, get rid of these ridiculous labor/union rules and let management run the companies without these silly constraints. Then, and only then, will we see a equilibrium of wages, ticket prices, and customer service.

  • John

    To add to my post above regarding Southwest: I personally think that it’s only a matter of time until they, too, begin charging checked bag fees and possibly change fees. The CEO has recently been under pressure from the board of directors to do this because they are currently losing our on a LOT of revenue from this. While it’s true that all else being equal, many people would rather fly Southwest than, say, US Airways, the extra market share that Southwest has supposedly been gaining from not charging bag fees isn’t very great at all. The same thing happened to Alaska. They tried to hold out from a first bag fee but then realized that all that it’s doing is costing them revenue so they implemented it. Again, I really do believe that we will see something from Southwest soon. They’ve already increase their excess baggage fees recently.

  • Colleen

    @carver

    The airlines inherent cost structure would not be changing. There would be no need for them to raise the rates on cargo. Now, businesses travel costs might rise but most of them are already paying higher amounts than pleasure travelers. So, yes, some businesses may raise thier prices to offset their travel costs. But, having worked for several fortune 500 companies as a controller, I can’t believe it would be terribly significant.

    When I said I’d gladly pay double the going rate for air travel, I didn’t mean to imply airlines would raise ALL rates by 100%. Just the lowest economy rates.

    @ John

    I would like to take exception to this statement

    “… However, it would also have the detriment of preventing anyone but the very elite from flying….”

    I am truly not the very elite. No where’s near it. The numbers thrown around by the press for those who may be subject to additional taxes in this niew administration seem to be those making $200,000 to $250,000 or more. They are the elite and not necessarily the very elite. My husband and I together make less than half that. I would fly again if my prices (lowest economy) doubled and conditions improved as I mentioned above. I have had enough of the nonsense that you mention.

    “…the delays, the checked bag fees, the worse customer service …”

    I am willing to pay for what is important to me.

  • carver

    @MarkieA

    Its a fair question. The statement that infrequent fliers cost the airlines more money is based upon statistics, i.e. the average infrequent flier.

    All things being equal, a person who does something more often is more efficient and knowledgeable than someone who does something less often. There are certain efficient behaviors that reduce costs.

    For example, someone using a kiosk or online check-in consumes fewer airline resources (i.e. check-in agents) than someone who check in with an agent. Notice how the kiosk check in line moves faster even though it has fewer agents. If everyone used the kiosk the airline would hire fewer check in agents and save money.

    Similarly ever been behind someone who checks 2 bags; one for 60 pounds the other 30 and hold up the line while they are shuffling clothes to avoid the overweight bag fee. Again, the airline needs more agents to keep the line moving. But yet, once you fly regularly, you have a pretty good idea of the limit. I”m always amazed that my big bag always comes in between 49 and 49.5 poungs. Experience.

    Basically, a frequent flyer requires fewer agents. Fewer agents = lowered costs. Its why many businesses give incentives to have you avoid a real peron, including bonus points, lowered fees, etc.

  • carver

    @colleen

    Cargo is only part of the equation. Business is far more intertwined that than. I’ll give you a real world example. I practice in both Los Angeles and the San Franciso Bay area. My pricing structure is based in part on the fact that transportation charges are fairly cheap. If transportation charges increase, then my rates have to increase to make up for the difference.

    Basically, that scenario is true for any business in which travel is a meaningful component.

    As far as just raising prices, you’re saying two different things. In the first post you correctly mentioned that fewer people would fly. But in the second post you imply that flying would be an experience open to all. You can’t have it both ways. As prices increase, fewer people are able to afford it. Whether you call the remaining people rich or middle class is a matter of semantics.

    What I don’t understand though. Why don’t you just buy a highly restricted first class ticket which would let you travel like you used to.

  • Barry Graham

    The reality is that we are getting air travel for dirt cheap prices, and so to charge a few dollars for luggage is not unreasonable. People want the airlines to stay viable, and charge cheap fares. So they are making up for it in other ways. I don’t have an issue with it, but then again I never check bags unless I absolutely have to.

  • Teri

    Here’s a way to generate revenue, charge a fee for the convenience of a giant carry on bag that doesn’t fit under your seat. Then we wouldn’t have to wait for all the people who carry on a large rollaboard and a giant bag and another bag. My last flight was delayed 20 minutes so all the ‘extra’ carry-ons could be gate checked. Now that makes me crazy. This way, it might be a more even mix of carry on and checked baggage. And, more money for the airlines, and time would be saved, etc.

    OF course, no charge for the first bag or carry on would work for me as well.

  • http://lonodoniscool.com William Wallace

    I hate having to pay to take luggage on a flight, but just like everyone else, know one is forcing me to pay the money with a loaded gun. I would feel happier though if the airline would just say hey we are doing it to make more profits and stop the bull shit reasons.

  • David Z

    I would feel happier though if the airline would just say hey we are doing it to make more profits and stop the bull shit reasons.

    Indeed. Unfortunately they also know telling the honest-to-goodness truth…would only turn people off anyway.

  • Cassandra`

    I dislike fare hikes in any shape or form just as much as the next passenger. If we all object to paying the baggage fees, wouldn’t it make sense for us to pack less and travel light? It will not only save us money but will also serve the environment well by creating less of a carbon footprint.

    If we make such a big fuss about paying these fees, why didn’t we protest the TIPS that we pay at restaurants, bars, hairdressers, and other service providers? They amount to 20% of the total bill, as opposed to $15/bag which most likely is less than 10% total fares paid.

  • Thaddeus Buttmunch

    I’m a physician and will be flying from the Carolinas to see my father in the Midwest at Thanksgiving. Because I’m not near a major “hub” will pay four or five hundred dollars. Also because I work during the week and cannot leave at Noon. What’s more, if I use US Airways they may lose my luggage. Delta is worse b/c the connection is always screwed up and I have to spend an unwanted night in Atlanta. They don’t count it in their “ontime” stats b/c it’s a feeder airline.

    what we REALLY need is a national bullet train. Competition for the airlines I say. Amtrak is a joke I admit. OK not practical NY-LA but Miami-Chicago or Seattle San Diego it IS. Those poor people in the Newark-Buffalo turboprop would be alive if they took a more practical Maglev train to their destination.

  • http://www.insathope.blogspot.com HSP

    I’ve tried to fight the battle: http://insathope.blogspot.com/2010/04/baggage-fees.html.

    I most wish that fees would be bundled, so that the baggage fees can be expensed as part of the cost of the flight.

  • http://www.clarkecomputer.com Charles Clarke

    I agree with Carver that unbundling lets airlines let us know how we can cut their costs and gives us incentive to do it. I rarely check a bag and when I do, I stuff it as full as I can so I only have to carry-on the irreplaceable.

    As for charging for carry-ons or for the weight of them, I could handle that also. Even though my computer bag feels like a ton of bricks at times.

    It would be nice if they also had “carry-on” stickers with your seat # on them. Then, if the overhead bins were full over your seat, you could throw that the oversized bag to the idiot 10 rows behind you that he placed there so he could grab it as he was getting off.

  • O. Olesen

    Let each passenger carry say 100 kilo free of charge, no matter whether it is your flesh or luggage. Very fair.

  • carolm

    I was livid at Trans Air in San Antonio, we flew in with Trans Air from Atlanta, going back, we were told our luggage was 1/2 inch too long! and
    they were going to charge us $49.00!!! We told them we flew in just 2 days ago and was not charge that. I told them that the Trans Air measured it in Atlanta and it went through just fine. But they told us either pay or I could not check in my luggage. I bought another suitcase from a suitcase store across the from Trans Air…mmmm…must be a common practice with Trans Air, the owner at the store gave us a 10 percent discount. I would rather spend a $100 for another suitcase rather than give the airline another dime!

  • http://www.bestcarry-onluggage.net Jeremiah Johnson

     The airlines do, what I refer to as “Feed my crap and tell me how good it tastes.” I obviously cleaned that up a little bit but the airlines continuously keep making up stories to try to convince the air traveler that they are always on the verge of going under and they cannot survive without the changes that they make. I, for one, believe very little that they tell me.