Keep Baggage Fees in Check as Airline Profits Soar


Baggage fees have airlines turning a profit, consumers upset, politicians outraged, airports envious and comedians mocking airline executives for laughing all the way to the bank. Why are we surprised by the fees and what are the best workarounds?

When the recession kicked in and consumer spending declined while gas prices started to soar, it's not hard to imagine emergency meetings at the major airlines regarding how to make more money off of their existing customer base. In a search-driven, price-comparison shopping world, simply raising airline ticket costs doesn't -- literally -- fly. They had to get creative with ancillary fees -- baggage, scheduling changes, leg room, food, etc.

Baggage is the biggie and they weren't conservative with the pricing. Instead of tacking on a more nominal $5-10 per bag, the going rate kicked in at $25 for the first bag and generally $35 for the second, each way. For a family of four traveling round-trip, that's an extra $200 above and beyond the airfare. Kayak has a useful chart outlining fees by airline, so you can do the total math on a trip and get the true cost. These days, just because an airline is offering the lowest price on the ticket, doesn't guarantee that's the most cost effective option once you add in applicable ancillary fees.

Baggage Fees Vary

Discount carriers like JetBlue (JBLU) and Southwest (LUV) offer everyone a break on baggage fees. JetBlue gives you the first checked bag for free, while Southwest charges nothing for your first two checked bags. Virgin American gives travelers a $10.00 break on the second bag, compared to major carriers. This is not to say the cost isn't absorbed and passed along some other way. Specific fees are sometimes not broken out when reported.

In other cases, even carry-ons aren't immune from surcharges. Budget carrier, Spirit Airlines (SAVE), still allows you to put something under the seat for free, but you'll shell out $30 to stuff anything in the overhead bin if you pay the fee online before you get to the airport. If you wait until you get to the gate, it'll cost $45. But, the ticket cost may be so low, the overall math could be worth it.

The Wall Street Journal broke down what the added baggage fees are per passenger. They estimate it at $8 per flier. That seems a little easier to swallow. It factors in the gamut of people checking in large, heavy luggage and those walking on with a carry-on gratis. When you look at it this way, the current baggage fee structure may be more fair than an across the board $8 hike. After all, if you travel light why should you pay the same as the family that seems to have packed up their entire home?

Frankly, overall, I am surprised there aren't more fees. I suspect they'll start to ramp up other means of monetizing through sponsorship and sampling. Talk about a captive audience for product trials of everything from sitcoms to sippy cups and chapstick to chips. Conan O'Brien should have a field day with all the new material. In the meantime, this week, his show did a spoof showing an airline executive trying (and failing) to keep a straight face regarding how they are barely turning a profit. "Ah, screw it, we're rich!" he finally breaks down and admits.

That's not nearly as rough as the PR blow from the user-generated video by soldiers returning from Afghanistan who were charged for their extra bags. Most major airlines quickly scrambled to expand their policies to allow for 4-5 bags free immediately with the rest reimbursed by the military. They should all be free, on-the-spot and the soldiers should be given every available first-class seat. No military family should be waiting for a baggage expense report to clear, so they can balance their often tight household budget. They've waited long enough to get their entire lives back on track.

Some lawmakers want to make sure all Americans aren't surprised curb side. They want greater transparency and up-front notification around fees. The better move is to work around them if you can. Here are some tips compiled from various sources, including USA Today and based on my first-hand experience flying almost every week for a decade:

Working Around Baggage Fees

Be decisive --
My daughter recently brought seven pairs of shorts for a five day trip to Miami. Enough said. Editing packing selections is an art form and there's tons of related advice around picking neutral colors and optimizing your ability to mix and match separates.

Wear it -- It may take longer to strip down at the TSA security check in, but what you're wearing is one of the most convenient carry-ons. Here's a more advanced move if you are traveling to and from the same place frequently, drop stuff of at an area dry cleaners. You'll lighten your load and check something off your TO DO list.

Spread out the weight -- Checked baggage generally must weigh 50lbs or less. Otherwise, you'll incur overweight charges even steeper (roughly $49 - $175) than the fee for a second bag (roughly $35). If you tip the scales, you may be better of spreading your belongings out in two bags.

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Three not the charm -- If you check three bags or more, charges jump to a starting price of $100.00 per each additional bag, each way (it's $125.00 each on Delta). At this point, you could find yourself in a situation where baggage charges may actually exceed the cost of your airline ticket.

Avoid wheels -- Regional jets have exceptionally small overhead bins. Anything with wheels becomes challenging. Lose them of you can and opt for a duffel bag or backpack instead.

Lighter luggage -- If you haven't bought luggage in more than three years, it's come a long way. Most notably, it's lighter with the popular 22-inch carry on now as low as 6lbs down from 10-15 lbs.

Ship it -- With excess baggage or over-sized bags, it may be worth getting a quote from your local UPS store or get a quote from FedEx. There are also "luggage shipping services," such as LuggageForward offering door-to-door delivery to your hotel, cruise ship, golf course or vacation home. Shipping rates are instantly calculated based on three simple criteria: luggage size, travel distance and service level (how fast you want it shipped). Prices tend to be about on par with what the airlines will charge you, but you'll have the added convenience of not having to lug your bags to the airport and not waiting for them in baggage claim.

Go premium or platinum -- If you have a credit card tied to an airline or a high-end membership, free checked bags or an allotment toward airline fees may be one of the "perks."

Get reimbursed -- According to the Business Travel Coalition, almost all corporate policies allow employees to be reimbursed for checked baggage fees. But, your accounting department may wonder why you didn't use more discretion.

Guess who says they need to raise prices next? Airports. Standby.

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