Airlines Raise Baggage Fees

There was a time when airline passengers could check their luggage for free unless it was over weight limits or exceeded size restrictions. Those days are gone. Now, in addition to the hassle of tightened security measures, passengers will be paying even more for checked luggage. Both Delta and Continental have announced increases to their baggage fees, as they try to beef up revenues that have come under pressure from fewer passenger miles and higher oil prices. Other airlines are expected to follow suit.

The increases are steep. Both Delta and Continental raised their fee for checking one bag from $15 to $25, while boosting the fee for a second bag from $20 to $35. The higher fees are expected to help both airlines turn a profit this year, after a year of severe losses. Overall, however, the airline industry faces an estimated $5.6 billion loss this year, which would actually be a big improvement in the estimated $11 billion in red ink that they logged last year. Baggage fees have become a key factor in airline profit-and-loss figures; in the third quarter of last year, airlines racked up $700 million in baggage fees, a jump of 111% over the same period last year.

The increases are expected to bring windfalls to budget airlines like Southwest and JetBlue. Southwest, which doesn’t charge for checked baggage, and JetBlue, which allows passengers to check the first bag free, have already seen an increase in passenger traffic. Airline industry analysts are also predicting increased business for shipping companies like UPS and Fedex, as more travelers avoid baggage fees by packing up their belongings and shipping them ahead.