U.S. Airlines Made $5.8B Last Year ... Just on Baggage Fees

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U.S. Airlines Made $5.8B Last Year … Just on Baggage Fees

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Now you know just how much you've being nickeled and dimed.

You read that headline right. U.S. airlines made nearly $6 billion just on baggage fees in 2019, according to data from the Bureau of Transportation Statistics. What was once an expected benefit of any plane ticket (and still is on Southwest Airlines) has become a cash cow for the airlines.
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Those fees helped airlines rake in nearly $21 billion in profits before taxes last year – up from $17.6 billion in 2018. And airlines aren't done.

Even the major carriers like Delta, United, and American started charging separately for bags way back in 2008. And airlines' revenue from baggage fees have increased steadily since 2013 – the year Delta became the first major U.S. carrier to begin selling basic economy fares.

Nearly every major carrier raised its baggage fee from $25 to $30 each way in 2018. More recently, JetBlue and United started charging $35 for travelers who don't pre-pay for a bag before getting to the airport. And American raised its baggage fee to a whopping $75 for basic economy flights to Europe.

Of course, coronavirus has turned airlines' fortunes around fast. American Airlines itself lost $2.1 billion in the first quarter of the year as demand for travel disappeared. Airlines across the globe are bracing for their worst year ever.


How to Avoid Baggage Fees

Pack in a carry-on bag: The simplest way to stop padding airlines' wallets is also free.

We urge all readers to pack in a carry-on whenever possible. Sure, it saves you money. But it also saves you time at airport check-in desks and baggage carousels – not to mention the risk of losing your belongings.

The one caveat here is that budget airlines charge for carry-on bags – and often more than they charge for a checked bag. And United's basic economy fares don't include a free carry on.

Read more: How to avoid paying Delta baggage fees


Carry an airline's co-branded credit card: Whether you're flying Delta, American, United or another major airline, a free checked bag is one of the better perks.

Considering most of these airline credit cards carry a $95 to $99 annual fee, that benefit will pay for itself after just two round-trip flights. Better yet, most of these cards extend the benefit to up to eight other passengers traveling on your reservation.

And finally, most airlines don't require you to actually pay with the credit card to get free bags – it's automatically attached to your frequent flyer number. United and JetBlue are two notable exceptions.


Stick with Southwest: While the rest of the airlines worldwide started charging for checked bags long ago, Southwest is the lone holdout.

You still get two free checked bags with every Southwest fare. It's one of the things that make Southwest stand out. And the airline's CEO says that isn't changing anytime soon.

We’re not going to charge for bag fees,” Gary Kelly promised last year, before taking a shot at his competitors: “They unbundle, and we don’t.”


Bottom Line

Airlines have turned the once-free checked bag into a consistent money maker.


Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

2 Responses

  • They are all crying help to maintain their high incomes while people out here are really suffering.

  • This is what upsets me about them getting a bailout (yes, some are loans, but they also got grants). They made hand over fist for something they have done for free for years. Now look at all the other things…paying more for legroom…or heck, even sitting closer to the front of the aircraft while still in a normal economy seat. My sister and brother in law both fly for one of the US3, and with my sister’s seniority, she will probably get furloughed in October (unless travel rebounds). I feel bad for them, but this also is the fault of the airlines. They have treated customers like sheep for years, nickel and dimed us for everything. The bought back a bunch of stock with money they should have kept. I understand they need to make a profit, but they need a gut check, and this is one of them.

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