Airline baggage fees lead to lower revenue

The general reaction I see to airline baggage fees is that people who frequently travel with no checked bags don't care (or think it's a good thing), whereas people who travel with checked bags are upset. That much is obvious, and it's kind of net neutral overall.<p>However, I think there is a far worse side effect of the change in pricing structure. The side effect is that <i>nobody</i> wants to check a bag, so the volume of baggage actually entering the plane's cabin has significantly increased. It makes boarding take longer, makes everything more crowded, and in general it's a huge hassle for everyone, including the luggageless travelers.<p>For that reason, I try to avoid airlines that charge baggage fees, even when I am flying with no bags at all.

There's an obvious selection bias here. Airlines that aren't facing a revenue decline don't need to charge baggage fees.

I've done this before, even if ticket prices are a little higher but there are no fees other than what I pay for initially. I hate getting to the airport and getting nickled and dimed at the check-in counter. There just seems to be something wrong with that.

I'm very surprised that the airline execs actually thought this would help revenue. The demand for travel is extremely elastic, therefore any increase in the costs of travel is going to cause a decrease in demand.

This reminds me of companies who spam their customer email lists... They only look at the immediate results without being accountable for how many people are tuning you out.

Why do people have a problem with being charged more for using more services? Wouldn't a college kid flying home for the weekend with only a backpack like to pay less than somebody taking a two week trip with three large suitcases?<p>Let's presume that the airlines will price in a profit optimizing way and that, in the long term, competition will limit their overall take. So, compared to a model where all passengers pay an all-inclusive fee, those using fewer services will pay less under the a-la-carte plan.<p>We don't think that hotels should be required to include dinner in the cost of the room, but we get mad when the airline charges $5 for an in-flight meal. We're happy to pay per-lb to ship stuff via UPS, but we don't want to pay per-lb for the bags we check? I don't understand.

I had thought the point of these extra fees was to make it more difficult to compare pricing between airlines. Add-on fees that don't get displayed with the fare make the actual price hard to see, which is good when they're all providing essentially equivalent goods. It's like online stores that all display the same price for an item but have wildly different shipping fees.

Correlation != causation.<p>Failing airlines added new fees and then continued to fail. Not sure you can blame the fees for that.

I would expect some hits to profit margin as well. I'll take an airline with a baggage fee if I don't have baggage, typically a short flight / overnight trip. I'll take Southwest for long haul flights when I typically have luggage. The long haul flights have higher margins than the shorter commuter/feeder flights.

Correlation is not causation.<p>The two airlines that still don't charge for luggage (Southwest and JetBlue) are the ones that have no union workforce, no pension liabilities, and in the case of JetBlue, new and fuel-sipping planes.

<p><pre><code> [$669.5 million is] an attention-grabbing 275 percent increase from the second quarter of 2008. </code></pre> Anyone else get annoyed by this very useless factoid from the very first paragraph?<p>--<p>The movie industry has the very same problem. This summer's blockbuster movie is created. Unfortunately, screenings reveal that the movie is terrible and no one actually wants to see it. So what does the industry do? Spend millions on advertising, hoping for a very strong first weekend showing.<p>And, like the airlines in the story, they wonder why (Avatar aside) sales are falling flat.