It’s clear that airlines are profiting from their ever-increasing baggage fees, but just how much are they making?
Yesterday, the U.S. Department of Transportation’s Bureau of Transportation Statistics published their airline financial data for Q1 of 2017. In this report, systemwide data was aggregated from 24 U.S. scheduled service passenger airlines, and it yields some impressive results.
The gross total collected from baggage fees for Q1 of 2017 was calculated at $1.027 billion, which accounts for 2.6% of the total operating revenue across all airlines considered.
This marks the fourth consecutive quarter that airline baggage fees have exceeded $1 billion, placing 2017 baggage fees on a trajectory to top the $4 billion mark for the second year in a row.
All in all, the combined total for baggage fees collected since 2012 hovers just under $20 billion.
What Can I Do to Avoid Baggage Fees?
As a customer, it seems almost impossible to avoid baggage fees, but there are a few things you can do to keep them more manageable.
- Know Your Airline’s Standard Fees – Each airline charges a different amount for baggage based on a multitude of factors. Knowing these policies in advance ensures you won’t be caught off guard when it comes to pricing.
- Pay for Baggage ASAP – Many airlines charge a higher fee the closer you get to your departure date. For example, Spirit Airlines charges $35 for a standard carry-on bag at the time of booking. However, if you choose to wait and pay at check-in, the same bag will cost $45. And if you wait to pay at the airport? $55 at the reservation desk or $100 at the gate. (source)
- Don’t Overpack – Airlines will charge extra fees for overweight or oversized luggage. Additionally, each airline’s specific limits for maximum size and maximum weight may vary. It’s sensible to review some packing tips and tricks on packing to stay within these limits and avoid excess fees.
- Utilize Credit Cards With Travel Credit – Certain credit cards provide a “travel credit” or “airline credit” that will reimburse passengers for related costs like baggage fees. For example, Chase Sapphire Reserve® cardholders are eligible to receive up to $300 in travel credit per calendar year.
You can read about airline baggage fee guidelines here.
The report from the Bureau of Transportation Statistics outlines a number of additional figures related to 2017 Q1 financial data like net income, operating profits/losses, and operating revenue.
Perhaps the most interesting note in relation to passenger fees is another ancillary charge: reservation changes and cancellations.
The gross total collected from reservation change/cancellation fees for Q1 2017 was $724 million, which accounts for 1.8% of the total operating revenue across airlines considered.
It appears total fee collections for reservation changes/cancellations took a significant cut in Q4 of 2016 but have begun trending upward again in Q1 2017. This substantial decline in Q4 of 2016 marked the first gross loss in this fee category in 5 years.
Additional data is needed before projecting 2017 yearly totals and determining whether last year’s downward trend will stick.
*Data utilized for this post courtesy of the Federal Bureau of Transportation Statistics.