FX Excursions

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Revenues From Baggage Fees Double in Four Years

by Megan Hill

Jun 3, 2019

Baggage Claim

Feature

Over the past four years, the airline’s revenue from baggage fees more than doubled, from $13 billion in 2014 to $28.2 billion in 2018.

A new report puts the airlines’ total revenue from ancillary charges at around $94 billion, as more airlines, especially in Europe and North America, start unbundling fares, charging passengers for everything from early boarding to seat selection privileges. The figures come from a new report by consultancy Idea Works Company and transport company Cartrawler.

Baggage fees were especially profitable. These fees refer to the cost of checking a bag, bringing a heavy or oversized bag, and, for some airlines, access to overhead bins for carry-ons.

“The value of airlines’ a la carte revenue, or optional extras that customers can add to their basic airline fares, has risen dramatically in recent years, growing by 128 per cent between 2014 and 2018,” said Aileen McCormack, chief commercial officer, Cartrawler. “So, it is no surprise that baggage fee revenue has grown by a similarly huge margin, in terms of both monetary value and as a percentage of overall global airline revenue.”

The report looked at the top 20 full-service airlines and found only half included checked baggage for all passengers. The other half charged extra for bags on a portion or the entirety of the route network.

Airlines that didn’t charge extra for checked bags were primarily in the Asia-Pacific and Middle East regions.

“The abundant reliance upon bag fees in Europe and North America occurs largely due to the presence of a very significant low-cost carrier industry,” the report states.

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