Key Points:
- Major airlines are adopting a two-tier pricing strategy for checked baggage, charging more for airport or last-minute payments.
- The goal is to encourage passengers to pay for checked bags online in advance, reducing airport congestion and enhancing operational efficiency.
- Elite frequent flyer status, top-tier class passengers, and certain rewards credit cardholders often enjoy exemptions from checked bag fees.
- Southwest Airlines allows customers to check two bags for free, emphasizing customer-friendly policies for building repeat business.
Major airlines, including United Airlines, American Airlines, and JetBlue Airways, have implemented a two-tier pricing strategy for checked baggage, encouraging passengers to pay in advance online rather than at the airport. This move aims to streamline check-in, reduce airport congestion, and enhance operational efficiency.
American Airlines recently raised its checked bag fees for the first time in over five years, adopting the two-tiered approach. Passengers traveling in coach will pay $35 for checking the first bag if done online in advance, compared to $40 if paid at the airport. This strategy is not new, as United, JetBlue, and several budget airlines have already implemented similar pricing structures.
The rationale behind lower fees for early payment is to incentivize travelers to complete transactions before arriving at the airport. Airlines argue that this approach allows their staff to focus more on passengers requiring additional assistance during check-in.
Elite frequent flyer status, top-tier class passengers, and those with specific airline rewards credit cards often enjoy exemptions, allowing them to check at least one bag for free on domestic or short international flights.
United Airlines started charging more for checked bags at the airport in 2020. Recently, the carrier announced a $5 increase in bag fees for most North American flights, bringing the prepay online fee to $35 and the airport fee to $40. The second checked bag will cost $50 or $45 if paid at least 24 hours in advance.
Baggage fees represent a significant revenue stream for airlines. In the first nine months of 2023, U.S. airlines generated over $5.4 billion from baggage fees, up more than 25% from the same period in 2019, citing increased costs for labor and fuel as reasons for the fee hikes.
Southwest Airlines stands out among major U.S. carriers by allowing customers to check two bags for free, emphasizing the importance of customer-friendly policies for building repeat business. Southwest’s Chief Operating Officer, Andrew Watterson, highlighted that charging $35 or $40 to handle a bag does not align with the actual cost and emphasized the benefits of a fair policy in fostering customer loyalty.
