Checked bag fees don't represent a pure increase in revenue and they come at a cost in boarding efficiency. A secret -- and huge -- benefit to the airlines from checked baggage fees comes from savings of hundreds of millions of dollars in taxes.
During the first six months of 2019 checked bag fees totaled $2.8 billion, putting airlines on pace to beat last year's record $4.9 billion haul from bag fees.Passengers don't simply pay more for travel because airlines raise prices. Ticket prices have been falling while checked bag fees rise.
Instead a good portion of the benefit to airlines from checked baggage fees comes from the tax code. If you don't like checked bag fees, blame tax law - and the people who write it. While some passengers - usually business travelers - are price insensitive, checked bag fees disproportionately fall on more price sensitive leisure travelers who take longer trips, check more bags, and are less likely to be exempt from the charges due to frequent flyer elite status.
Southwest Airlines, which doesn't charge fees for each passenger to check up to two bags, even thinks they make more money not charging checked baggage fees.Passengers carry on more bags because they'd have to pay to check them. That slows down the boarding process. Slower boarding means less efficient use of aircraft and more delays, whichGate checked bags add a few minutes to the boarding process.
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