Why Airlines Love Baggage Fees

Ever since the airline industry introduced baggage fees in 2008, passengers have been grumbling about the fee-less golden years of yore.

But according to a new study out of the University of Kansas, baggage fees are not entirely bad for passengers: They have contributed to fewer departure delays for U.S. airlines.

When baggage fees were first introduced, airlines justified them as a way to influence customers to travel with less baggage and therefore improve operational cost. Eight years later, researchers say it seems to have worked, along with some other unexpected benefits.

“Because passengers changed their behavior, less weight went into the plane below the cabin,” Mazhar Arikan, an assistant professor at the university’s School of Business, said in a statement. “This offset any changes in carry-on luggage, and it helped airlines improve their on-time departure performance. The below-the-cabin effect dominates the above-the-cabin effect.”

The researchers studied more than 9 million flights from 2007 to 2009, directly before and directly after the charges were introduced. They found that when an airline charged for baggage, departure times improved 3.3-to-4.2 minutes, and delays were reduced 1.3-to-2 minutes.

Each operational minute that an airline can cut translates to savings. Total operational costs for an airplane amount to about $65 per minute, according to Airlines for America.

And, of course, airlines have made some serious cash just by charging the fees themselves. Some estimates value baggage fees at $3.35 billion annually for the airline industry.

For airlines like Southwest which made a brand statement by eschewing the fees, the per-minute operational savings could make them change their tune. But Southwest has no plans to change their “Bags fly free” policy.

“We don’t view checked bags as a significant detractor from our overall on-time performance when weighed against the baggage convenience we offer our customers,” Steve Hozdulick, Southwest’s managing director of operational performance, said in a statement.

 

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