4 ms·

Airline Baggage Fees Are a Good Deal for Travelers

13 points by negrit 11y ago

PaulHoule 11y ago
When I fly I send as much of my stuff checked as possible except for a backpack I stuff under the seat in front of me. I just don't want to be part of the crush of people wheeling wheels around the airport, trying to pack as much as possible within the "free limit". When I do a check a bag that I don't need to check, often the baggage handlers will question why I am checking this bag, they'll tell me it is a waste of money and I tell them I have the credit card so I get a free bag.
- scurvy 11y ago
  Gotta wait for the bag to arrive at baggage claim though. At some airports, this can just take a long time. In Denver, you might not ever see that bag again. It's also a slow proposition when flying late at night into smaller airports. I frequently fly SFO-MSY that lands at midnight CT. I swear there's only a single bag handler in all of MSY at that point. Not unheard of to wait an hour for your bag. I think most people prefer to carry on for these reasons, not just avoiding the fee. International, I always check the bag. Global Entry makes up for any lost time in waiting for a bag.
wflann 11y ago
It seems this analysis is forgetting the revenue made by the airline by selling tickets to passengers. If it's too expensive to check a bag, the airline will have empty seats and a lot more empty space wasted.
hapless 11y ago
Air shippers offer a money-back guarantee on timely delivery of the baggage. If an express cargo package is bumped from a plane, the very next plane will take it to its destination, because failure is expensive. My checked baggage, on the other hand, is a strictly best-effort affair. If it doesn't fit on my plane, it becomes a "gets there when it gets there" problem. Once it's bumped once, the airline sees little reward in getting it to me faster or slower. There's good odds I will never see it again. Comparing a $25 checked bag fee to a contracted cargo shipment is quite unfair. -- edit: Here's another fun item. Technically, the conditions of carriage on your ticket don't require them to bump cargo for your baggage. And there's no incentive for them to do so. http://www.bloomberg.com/bw/articles/2014-07-09/a-lawsuit-could-reveal-if-passenger-bags-get-bumped-for-airline-cargo http://www.bloomberg.com/bw/articles/2014-07-09/a-lawsuit-co... “It costs United nothing to remove checked baggage, rather than cargo, in order to arrive at an acceptable aircraft weight because the checked baggage fee is purportedly nonrefundable, and United can simply transport the checked baggage on a later flight to the passenger’s destination.”
- tgb 11y ago
  While I completely see your point, it sounds pessimistic to me. The last time I had a bag end up on a wrong flight (which happened only because I got on an earlier flight from standby), they delivered the bag to my doorstep several hours later. I was impressed and had been ready to sit around the airport for while waiting for it. Other than that, I have literally never had a bag on the wrong flight, even when travelling cross country. Honestly, if they handled passengers as well as they handled my bags, I'd be happy.
  - hapless 11y ago
    I actually looked this up. The mishandled baggage rate is now 7.3 bags per thousand passengers. (It has fallen considerably in recent years, since baggage fees reduce the amount of baggage carried per passenger) I have had snafus often enough that I no longer check bags, in any capacity. If I can't carry it myself, I mail it in advance.
    - newjersey 11y ago
      Funny enough, the postal service has managed to lose one of two parcels I had sent to myself. The tracking number showed that it got to a halfway point and that's it. Getting someone on the phone was impossible. Going to the local post office was not easy either (snow season) and when I finally did, it didn't seem like the package ever made it there. Apparently, if the USPS manages to get a package mishandled, they will send it all to a sorting facility near Atlanta, Georgia. I'd have to fill a form to start an investigation. Of course, the form is not available on the USPS website. Thankfully, it wasn't something ridiculously valuable. However, if I ever have something of value it will stay with me. No, I will not check that carry on either.
      - AnimalMuppet 11y ago
        I only know of one item that the post office lost for me, in 30 or so years. Unfortunately, that one item was a mortgage payment on my house...
    - 11y ago
dwg 11y ago
The argument has some holes. First, the conclusion that baggage fees are a good deal doesn't follow since the baggage fee shortfall is accounted for in the price of the ticket. A more valid conclusion is that travelers who don't check bags are subsidizing travelers who do. Second, opportunity cost is used to conclude that the fees are a good deal. However, most travelers won't travel without baggage and since baggage fees we're most likely just a way to raise prices without raising the ticket price per se, it's a wash. I suppose it would be different if the article made a case for cheaper, carry-on only flights which sell the cargo space for shipping. Does something like this exist? Seems to be a good business opportunity if not.
- pedalpete 11y ago
  Agree, just because you are using an asset (the travelling space) and charging two different prices for it, doesn't mean one is getting it cheap. When bookstores started putting coffee shops in them, the coffee shop only took a small portion of the bookstores footprint. Though the revenue per square foot was larger for the coffee shop, they don't just say 'we should charge more per book because of the revenue difference to the rev/sqft in the coffee shop. Seriously flawed logic.
  - danwyd 11y ago
    The point is that there's a serious opportunity cost. By prioritizing customer service (to some degree), airlines can't charge sell space to businesses moving cargo for a higher margin. The coffee shop argument doesn't really work because you can't keep scaling it. At a certain point people want space for books. But given that there's a space shortage on international flights, there's probably room for airlines to make more money by charging for freight instead of taking your luggage.
naspinski 11y ago
Correct me if I am wrong, but when these fees showed up, my ticket price did not drop by the same amount, correct? So adding a fee, no matter how much of a "good deal" it is is still a addition to cost.
- Justin_K 11y ago
  Exactly. Author missed that point.
- AnimalMuppet 11y ago
  Yes and no. Airline prices have been dropping in real terms since the 1980s, if not sooner. (Of course, the airline experience has been dropping also.) I recall reading that since about 1960, net profit for the (US domestic) airline industry has been $0. And the history of the airline industry has been bankruptcy, reorganization, lockout, rinse and repeat. So airline ticket prices have been dropping to the point that airlines don't make money. So the baggage fees, yes, did not cut ticket prices, but ticket prices were arguably too low to begin with. It would have been better for airlines to honestly increase ticket prices, of course...
Justin_K 11y ago
Except the standard was to include these costs in the ticket. So add the cost of your ticket and it's not such a good deal.
outside1234 11y ago
Sounds like an opportunity for BagBNB to connect shippers with passengers without hold baggage. :)
- elbigbad 11y ago
  I know this is in jest, but I think one of the biggest problems with this would be the security implications. I wouldn't put my name on a stranger's bag if I didn't know them. Next thing you know, TSA finds illegal substances or something and you're in a lot of trouble because, after all, your name was on the bag!
  - deleted 11y ago
    [deleted]
- calbear81 11y ago
  We talked about this at work a few years ago since it seemed like a prime arbitrage opportunity. We looked at the cost of overnight shipping of a letter or document and thought maybe you could set up terminals at the airports and someone can be paid to carry it on board and drop it off at the receiving station on the other end. The security implications came up and my coworkers decided to call the idea "bombvelope"
bickfordb 11y ago
This reminds of one time when I was on an Alaska Airlines Anchorage flight and the front half of the plane was sealed off for cargo.
martinald 11y ago
Perhaps this is different on long haul widebody flights - but one of the secrets of ryanair/easyjet's success is their ability to get so few checked in bags onboard. I've sometimes seen as few as maybe 5-10 bags going in the hold. Now that means there's a lot of space going free in the cargo hold, but it means you can turn the flights round ridiculously quickly. Which means you can do many more segments per day and you don't have the plane sitting their deprecating. edit: it's also great for a passenger as it can take up to an hour in big airports to get the bags onto the belts. i hate checking in bags now and curse myself every time I do.
- slapshot 11y ago
  Southwest has the opposite thesis: it believes that baggage handlers are faster at loading bags under the plane than passengers would be trying to stuff those bags overhead. At least in the US, Southwest is known (notorious) for the having the fastest ground turns of 737s. They started at 10 minutes [1] and have moved to a leisurely 25 minutes, against a US average of 90 minutes. This seems to make a lot of sense to me -- baggage handlers are pretty fast and can move bags much faster than passengers can board a plane. Moving luggage handling below the plane allows two parallel tasks to execute: one stream is focused on passengers finding seats and the other is focused on bags being loaded. Otherwise you have serial execution of passengers trying to upload bags to the bins before the next passenger can do anything. [1] http://www.cnbc.com/id/43768488 http://www.cnbc.com/id/43768488
  - pavel_lishin 11y ago
    But don't most people bring a carry on on board anyway?
    - cozzyd 11y ago
      The issue is that on other airlines that charge baggage fees, everyone brings a big roller bag on board. There isn't enough room for everyone's bag, so this leads to a massive slowdown as people try to find a spot, flight attendant's trying to convince people to put stuff that fits under seats under the seat, etc.
supercoder 11y ago
I always just FedEx my luggage anyway to save time at the airport.
pavel_lishin 11y ago
> Here’s the takeaway: when airlines check your suitcase for $25, they’re giving up space for which freight forwarders would pay $40 to $100 to transport air cargo. Uh, but if they decide not to ship my bag^, they also decide not to ship me, because I'm not planning on buying a whole new wardrobe at my destination. Also, doesn't this imply that they should be paying me not to check luggage?
devy 11y ago
Author is a long time import/export supply chain business man. So his views are naturally reflected his narrow domain. I think we probably all agree that paying extra luggage fees that we don't used to pay is NOT a good deal. We also know that airline industry are struggling in the post-911 era. They have been trying to extract every possible revenue streams they can possibly get: narrower but more seats on the same plane, more granular levels of seat upgrades, non-free in flight meals, change of milage programs and luggage fees. As some of the other commenters pointed out, the author failed to recognize that airliners are making profit not because of those extra fees but by carrying more passengers (and more efficiently). And customer patronage and airfares have DIRECT impact on the sales (e.g. post 911 airline industry slump). Author also failed to recognize that each passenger carried with luggage, there are more ways for airlines to sell added-value services (drinks, merchants, in-flight movies, seat upgrades etc) to. So to say that carrying air freight is going to be more profitable for airlines is absurd. I almost wonder if the author was getting paid to write this article or perhaps trying to stir up getting some PR exposure out of this absurd post.

13 points by negrit 11y ago

When I fly I send as much of my stuff checked as possible except for a backpack I stuff under the seat in front of me. I just don't want to be part of the crush of people wheeling wheels around the airport, trying to pack as much as possible within the "free limit". When I do a check a bag that I don't need to check, often the baggage handlers will question why I am checking this bag, they'll tell me it is a waste of money and I tell them I have the credit card so I get a free bag.

scurvy 11y ago
Gotta wait for the bag to arrive at baggage claim though. At some airports, this can just take a long time. In Denver, you might not ever see that bag again. It's also a slow proposition when flying late at night into smaller airports. I frequently fly SFO-MSY that lands at midnight CT. I swear there's only a single bag handler in all of MSY at that point. Not unheard of to wait an hour for your bag. I think most people prefer to carry on for these reasons, not just avoiding the fee. International, I always check the bag. Global Entry makes up for any lost time in waiting for a bag.

wflann 11y ago

It seems this analysis is forgetting the revenue made by the airline by selling tickets to passengers. If it's too expensive to check a bag, the airline will have empty seats and a lot more empty space wasted.

hapless 11y ago

Air shippers offer a money-back guarantee on timely delivery of the baggage. If an express cargo package is bumped from a plane, the very next plane will take it to its destination, because failure is expensive. My checked baggage, on the other hand, is a strictly best-effort affair. If it doesn't fit on my plane, it becomes a "gets there when it gets there" problem. Once it's bumped once, the airline sees little reward in getting it to me faster or slower. There's good odds I will never see it again. Comparing a $25 checked bag fee to a contracted cargo shipment is quite unfair. -- edit: Here's another fun item. Technically, the conditions of carriage on your ticket don't require them to bump cargo for your baggage. And there's no incentive for them to do so. http://www.bloomberg.com/bw/articles/2014-07-09/a-lawsuit-could-reveal-if-passenger-bags-get-bumped-for-airline-cargo http://www.bloomberg.com/bw/articles/2014-07-09/a-lawsuit-co... “It costs United nothing to remove checked baggage, rather than cargo, in order to arrive at an acceptable aircraft weight because the checked baggage fee is purportedly nonrefundable, and United can simply transport the checked baggage on a later flight to the passenger’s destination.”

tgb 11y ago
While I completely see your point, it sounds pessimistic to me. The last time I had a bag end up on a wrong flight (which happened only because I got on an earlier flight from standby), they delivered the bag to my doorstep several hours later. I was impressed and had been ready to sit around the airport for while waiting for it. Other than that, I have literally never had a bag on the wrong flight, even when travelling cross country. Honestly, if they handled passengers as well as they handled my bags, I'd be happy.
- hapless 11y ago
  I actually looked this up. The mishandled baggage rate is now 7.3 bags per thousand passengers. (It has fallen considerably in recent years, since baggage fees reduce the amount of baggage carried per passenger) I have had snafus often enough that I no longer check bags, in any capacity. If I can't carry it myself, I mail it in advance.
  - newjersey 11y ago
    Funny enough, the postal service has managed to lose one of two parcels I had sent to myself. The tracking number showed that it got to a halfway point and that's it. Getting someone on the phone was impossible. Going to the local post office was not easy either (snow season) and when I finally did, it didn't seem like the package ever made it there. Apparently, if the USPS manages to get a package mishandled, they will send it all to a sorting facility near Atlanta, Georgia. I'd have to fill a form to start an investigation. Of course, the form is not available on the USPS website. Thankfully, it wasn't something ridiculously valuable. However, if I ever have something of value it will stay with me. No, I will not check that carry on either.
    - AnimalMuppet 11y ago
      I only know of one item that the post office lost for me, in 30 or so years. Unfortunately, that one item was a mortgage payment on my house...
  - 11y ago

dwg 11y ago

The argument has some holes. First, the conclusion that baggage fees are a good deal doesn't follow since the baggage fee shortfall is accounted for in the price of the ticket. A more valid conclusion is that travelers who don't check bags are subsidizing travelers who do. Second, opportunity cost is used to conclude that the fees are a good deal. However, most travelers won't travel without baggage and since baggage fees we're most likely just a way to raise prices without raising the ticket price per se, it's a wash. I suppose it would be different if the article made a case for cheaper, carry-on only flights which sell the cargo space for shipping. Does something like this exist? Seems to be a good business opportunity if not.

pedalpete 11y ago
Agree, just because you are using an asset (the travelling space) and charging two different prices for it, doesn't mean one is getting it cheap. When bookstores started putting coffee shops in them, the coffee shop only took a small portion of the bookstores footprint. Though the revenue per square foot was larger for the coffee shop, they don't just say 'we should charge more per book because of the revenue difference to the rev/sqft in the coffee shop. Seriously flawed logic.
- danwyd 11y ago
  The point is that there's a serious opportunity cost. By prioritizing customer service (to some degree), airlines can't charge sell space to businesses moving cargo for a higher margin. The coffee shop argument doesn't really work because you can't keep scaling it. At a certain point people want space for books. But given that there's a space shortage on international flights, there's probably room for airlines to make more money by charging for freight instead of taking your luggage.

naspinski 11y ago

Correct me if I am wrong, but when these fees showed up, my ticket price did not drop by the same amount, correct? So adding a fee, no matter how much of a "good deal" it is is still a addition to cost.

Justin_K 11y ago
Exactly. Author missed that point.
AnimalMuppet 11y ago
Yes and no. Airline prices have been dropping in real terms since the 1980s, if not sooner. (Of course, the airline experience has been dropping also.) I recall reading that since about 1960, net profit for the (US domestic) airline industry has been $0. And the history of the airline industry has been bankruptcy, reorganization, lockout, rinse and repeat. So airline ticket prices have been dropping to the point that airlines don't make money. So the baggage fees, yes, did not cut ticket prices, but ticket prices were arguably too low to begin with. It would have been better for airlines to honestly increase ticket prices, of course...

Justin_K 11y ago

Except the standard was to include these costs in the ticket. So add the cost of your ticket and it's not such a good deal.

outside1234 11y ago

Sounds like an opportunity for BagBNB to connect shippers with passengers without hold baggage. :)

elbigbad 11y ago
I know this is in jest, but I think one of the biggest problems with this would be the security implications. I wouldn't put my name on a stranger's bag if I didn't know them. Next thing you know, TSA finds illegal substances or something and you're in a lot of trouble because, after all, your name was on the bag!
- deleted 11y ago
  [deleted]
calbear81 11y ago
We talked about this at work a few years ago since it seemed like a prime arbitrage opportunity. We looked at the cost of overnight shipping of a letter or document and thought maybe you could set up terminals at the airports and someone can be paid to carry it on board and drop it off at the receiving station on the other end. The security implications came up and my coworkers decided to call the idea "bombvelope"

bickfordb 11y ago

This reminds of one time when I was on an Alaska Airlines Anchorage flight and the front half of the plane was sealed off for cargo.

martinald 11y ago

Perhaps this is different on long haul widebody flights - but one of the secrets of ryanair/easyjet's success is their ability to get so few checked in bags onboard. I've sometimes seen as few as maybe 5-10 bags going in the hold. Now that means there's a lot of space going free in the cargo hold, but it means you can turn the flights round ridiculously quickly. Which means you can do many more segments per day and you don't have the plane sitting their deprecating. edit: it's also great for a passenger as it can take up to an hour in big airports to get the bags onto the belts. i hate checking in bags now and curse myself every time I do.

slapshot 11y ago
Southwest has the opposite thesis: it believes that baggage handlers are faster at loading bags under the plane than passengers would be trying to stuff those bags overhead. At least in the US, Southwest is known (notorious) for the having the fastest ground turns of 737s. They started at 10 minutes [1] and have moved to a leisurely 25 minutes, against a US average of 90 minutes. This seems to make a lot of sense to me -- baggage handlers are pretty fast and can move bags much faster than passengers can board a plane. Moving luggage handling below the plane allows two parallel tasks to execute: one stream is focused on passengers finding seats and the other is focused on bags being loaded. Otherwise you have serial execution of passengers trying to upload bags to the bins before the next passenger can do anything. [1] http://www.cnbc.com/id/43768488 http://www.cnbc.com/id/43768488
- pavel_lishin 11y ago
  But don't most people bring a carry on on board anyway?
  - cozzyd 11y ago
    The issue is that on other airlines that charge baggage fees, everyone brings a big roller bag on board. There isn't enough room for everyone's bag, so this leads to a massive slowdown as people try to find a spot, flight attendant's trying to convince people to put stuff that fits under seats under the seat, etc.

supercoder 11y ago

I always just FedEx my luggage anyway to save time at the airport.

pavel_lishin 11y ago

> Here’s the takeaway: when airlines check your suitcase for $25, they’re giving up space for which freight forwarders would pay $40 to $100 to transport air cargo. Uh, but if they decide not to ship my bag^, they also decide not to ship me, because I'm not planning on buying a whole new wardrobe at my destination. Also, doesn't this imply that they should be paying me not to check luggage?

devy 11y ago

Author is a long time import/export supply chain business man. So his views are naturally reflected his narrow domain. I think we probably all agree that paying extra luggage fees that we don't used to pay is NOT a good deal. We also know that airline industry are struggling in the post-911 era. They have been trying to extract every possible revenue streams they can possibly get: narrower but more seats on the same plane, more granular levels of seat upgrades, non-free in flight meals, change of milage programs and luggage fees. As some of the other commenters pointed out, the author failed to recognize that airliners are making profit not because of those extra fees but by carrying more passengers (and more efficiently). And customer patronage and airfares have DIRECT impact on the sales (e.g. post 911 airline industry slump). Author also failed to recognize that each passenger carried with luggage, there are more ways for airlines to sell added-value services (drinks, merchants, in-flight movies, seat upgrades etc) to. So to say that carrying air freight is going to be more profitable for airlines is absurd. I almost wonder if the author was getting paid to write this article or perhaps trying to stir up getting some PR exposure out of this absurd post.