Charging for carry-ons

By Felix Salmon
April 6, 2010
negative bag-check fee. But how about charging money for carry-ons? Spirit Airlines has now announced it's going to do just that: while a small carry-on which fits underneath the seat in front of you is fine, anything which requires stowing overhead is going to cost at least as much as that checked bag.


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Airlines save money when their customers check bags rather than carry them on board the plane. How to encourage their customers to do just that? They don’t seem to be jumping at the idea of the negative bag-check fee. But how about charging money for carry-ons? Spirit Airlines has now announced it’s going to do just that: while a small carry-on which fits underneath the seat in front of you is fine, anything which requires stowing overhead is going to cost at least as much as that checked bag.

The point is that it makes no sense to penalize people for doing something — checking their luggage — which makes the flight more pleasant for their fellow passengers, and which saves money for the airline as well. Unless you have a baby, you don’t need more than a small bag’s worth of stuff on the flight itself. So if you insist on carrying that huge wheelie suitcase or duffel bag on board, then why should the airline let you do so for free if they’d otherwise charge you to check it?

And as Basili Alukos notes, we’re still talking here about sums of money significantly less than it would cost to ship the same bag. Maybe, if people start having to pay good money to travel with luggage, they might start traveling with less. Which would be a boon to everybody.

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Comments
18 comments so far

Frequent business traveler here. I would agree, with two provisos. First, that airlines stop losing checked bags, period. Having to pay for checked bags that are lost adds insult to injury. Second, that we don’t have to wait 40 minutes or more for the checked bags to become available. I don’t mind waiting when on vacation, I do when on business.

Posted by Curmudgeon | Report as abusive

“Maybe, if people start having to pay good money to travel with luggage, they might start traveling with less. Which would be a boon to everybody.”

You need to make the fact that you’re joking far more obvious here. I almost thought you were serious. Perhaps a line like, “After all, who needs to go on vacations, visit their families, or go on business trips?”

Posted by jmh530 | Report as abusive

I usually agree with your positions, but you have gone off the deep end recently.

Not everyone takes a day trip. Not everyone travels for business.

Some people actually stay where they are going for a week or two. It’s not always convenient to ship stuff ahead.

Recognize what’s happening here. The banks steal money from the public and are rewarded for doing so. The airlines are also learning to steal. Otherwise they would never become profitable.

Posted by MarkWolfinger | Report as abusive

“Airlines save money when their customers check bags rather than carry them on board the plane.”

Care to back that up?

Checked bags take up room that might otherwise be used for cargo, and also require paying unionized baggage handlers to load and unload from the plane (versus having the passenger perform that service themselves). Your statement only makes sense after the point where the overhead bins are completely full (at which point the plane may be delayed by gate-checking bags).

The larger cost of baggage fees is probably the weight of the bags (in terms of increased fuel consumption). In this case, airlines have chosen to charge for checked bags, guessing that they will, on average, be heavier than bags that passengers are willing and able to carry onboard (due to the size restrictions placed upon carry on luggage).

In theory, the airlines should weigh the passenger plus the passenger’s bags and charge a prorated amount based on the total weight, but there are obviously transaction costs associated with that, and the “fee for checked bags” provides a predictable price that consumers are likely to appreciate more than the “variable fee based upon weight”.

Posted by factorial | Report as abusive

I always travel exceedingly lightly — one small bag beneath the seat, and one bag overhead. That’s the kind of minimal weight situation that should be given a free pass, IMHO.

For a decade, I would always check my second bag during my thrice-yearly trips — until it was lost. I don’t like the idea of being forced to pay to avoid a replay of that nightmare.

I’m not surprised at Spirit’s move, though. Collectively, the airline industry has always lost money, so these kinds of things are pretty much inevitable.

Posted by Mega | Report as abusive

First, it’s debatable that airlines save money when travelers check bags (in fact, it’s likely the opposite).

But I thought everyone knew the Pricing 101 stipulates that you price on what the market will bear, not what it costs to deliver.

Posted by pbreit | Report as abusive

Apparently, SOME airlines make a tidy profit from checked-in luggage. This from yesterday’s FT:

Ryanair is increasing its checked luggage fees from £15 to £20 for the busiest summer months of July and August, in a move analysts estimated could raise up to £20m ($30m).

Posted by BuyHighSellLow | Report as abusive

As I mentioned in your first post on this subject, you have to compare with the industry cost leader – Ryanair.

As 2 posters have pointed out, airlines most likely don’t save money by having bags checked.

The variables are multiple but your argument was based on speeding up boarding. If that can be achieved by other means (no assigned seating as in the Ryanair and Easyjet) example then charging for checked luggage is a money maker.

Michael O’Leary (Ryanair CEO) is on record that his ideal customer checks-in online and only carries hand luggage.
This way he saves baggage handling fees and check-in desk rental fees. He doesn’t even need boarding pass printing terminals.

Trust me – he knows how to save every cent: checking bags is BAD for the airline.

Posted by TinyTim1 | Report as abusive

My checked bags were lost nearly as often as they were damaged, so when the airlines began charging to check bags, I stopped checking them. That was a no brainer for me. Many people must have come to the same decision because the monthly flights I take began to look like third-world, backwoods bus trips, with passengers shoving everything but livestock into the overheads and under their seats. So now we’ll all go back to checking our bags. Great. But all we’ve gained as passengers is a brief reprieve from carry-on claustrophobia. Right away, the increase in the number of checked bags will produce a flurry of abused suitcases, lost lingerie and misdirected evening wear. Complaints will be made and refunds demanded. Measures will be taken, and of course those measures will need to be paid for, so checked baggage fees will rise again, and, once again, passengers will begin cramming the unmentionable necessities of their travelling lives into the now comparatively cheaper onboard overhead compartments. It will end right back where it began, only we’ll all be paying more for it.

Posted by Seabelly | Report as abusive

Any company that argues for (even) more Soviet-style austerity in its travel provisioning than already prevails on most of today’s American airlines needs to get out of the travel industry, and stay out. They’re just not up to the job.

Posted by HBC | Report as abusive

the market place will solve this let them charge and don’t fly them ,since it is albout money they will get the message real soon…or just go out of business…if you really wanta story find out who is stopping SWA from flying internationally…can anyone say the old PAN AM …TWA battle from many years ago….felix salmon ,really and who is paying for your trips ….

Posted by delmarjohn | Report as abusive

Build high speed railroads from city to city!
Flying was fine as long as their were not too many passengers. But as mass transit between metro areas a few hundred miles apart, like the Bay Area and LA, it just does not work. With all the security after 9/11 it has become a Soviet style joke.

Posted by nossnevs | Report as abusive

It sounds okay to me as long as they charge double for sceaming carry-on children.

Posted by scrypton | Report as abusive

I don’t agree with your lead-in premise either -> ‘Airlines save money when their customers check bags rather than carry them on board the plane.’ Care to unBlogetize that statement with a link?

I’m not sure, but your post appearing the same day as this NY times article suggests that your post is an analysis of the meme they started? http://www.nytimes.com/2010/04/07/busine ss/07bags.html?nl=todaysheadlines&emc=a6

Either way, I think that article clearly identifies the trend – i.e. that airlines are going to continue charging for every service separately, and whatever fees they don’t make in checked baggage (because people check less, whatever) will be replaced by lucrative ‘cargo’ fees.

I find particularly moronic the quote from the Sprint Airlines CEO -> ‘Nobody brings their package to FedEx or U.P.S. and expects them to ship it for free…’ Uh, hello, I (and my bags) are your package, so the comparison is not apt. The appropriate one would be if FedEx charged you for shipping your package AND the materials used to transport it AND the service incidental to that such as registering it in their system, etc. The logical conclusion of this argument is that airlines will start weighing each passenger and pricing by the pound.

In the end, this will only push people to use air travel less – it will become so costly and/or onerous that people will resort to it only in those ‘must do’ situations. Airlines are sacrificing (again) long term business strategy for short term gains. How many years until the next airline bailout and change of business strategy?

Posted by terrymj | Report as abusive

What about business travellers? Last time I checked pissing off your customers is not a smart business strategy for future growth. I travel internationally and I don’t check in bags because of the incompetence of the entire airline industry. If I am going to be nickled and dimed for everything, I will simply not fly that airline OR not fly at all. More people might be inclined to do the same and drive to their vacation if flying becomes such an incredible hassle. With the internet, the need to travel for business is also shrinking, this kind of policy will give businesses more incentive to use teleconferencing technology. I’m sure that would be terrific for business in such a razor thin margin industry. I bet the geniuses who are coming up with these piss-off-the-customer ideas went to the same B-schools as the idiots that nearly brought down the world economy.

Posted by BB1978 | Report as abusive

I do love the outrage about the Airlines doing it to make money. The horrer to think a for profit organization is doing something in order to make a profit. And why does it seem to matter whether or not they save money, people are commenting as if saving them money justifies them charging you. Don’t you get it, the not only get the benefit of added revenue but also lower cost. Shouldn’t that garner more outrage and not less.

And by the way, there is another Reuters story posted that mentioned that Spirit has seen their booking rise 50% since the announcement. That came from them lowering the base fare and attracting cost concious travelers who will forgo a carryon to save money.

So as is customary with these fee schemes that lower the base cost of the ticket, people complain and complain that it isn’t right, but then they go buy the tickets. So what is an airline that competes with Spirit to do. If they see their bookings drop 10 or 15 percent as people jump to Spirit’s cheaper base fare. Are they going to stand by idle? They’ll either spend money trying to convince you their better (SouthWest) or they’ll lower their base fare, slap on a baggage fee and compete for the customer.

At the end of the day, the vast majority of fliers care about one thing the BASE FARE. So if an airline can figure a way to lower that base fare, they will. And there is an old saying that goes with that, you get what you pay for. You want a cheap fare, you get cheap service. You want better service you by it ala cart. Or fly business class with one of the major. See you all in the skys. I’ll be the guy on United who paid the $50 for the extra leg room seats in the front.

Posted by JMC1234 | Report as abusive

Oh and by the way, do you think your bags fly free on Southwest. Nothing in life is free people, nothing. It is built into what Southwest charges you for a ticket, or they would be losing money, not be profitable.

Posted by JMC1234 | Report as abusive

I totally agree, with a proviso. I recently booked and flew a round trip that was partially on Southwest. I had forgotten their non-cooperation policy. I was forced to carry on an excessively large bag, risking intervention by Southwest, irritating other flyers, slowing boarding and deboarding, and discarding toiletries coming and going, because otherwise Southwest would have dumped my bags outside security in Phoenix, almost guaranteeing a missed connection. I won’t be flying Southwest any more, but my point is that an airline which refuses to cooperate with others in routing checked bags should not encourage checked bags.

Posted by igiveup | Report as abusive
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