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U.S. Airlines Made $4.9B Last Year … Just on Baggage Fees

Airline Baggage Fees

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Now you know just how much you’re being nickeled and dimed.

You read that headline right. U.S. airlines made nearly $5 billion just on baggage fees in 2018, according to federal data first reported by The Points Guy. What was once an expected benefit of any plane ticket (and still is on Southwest Airlines) is now a cash cow for the airlines. It doesn’t hurt that nearly every major carrier raised its baggage fee from $25 to $30 each way in the last year.

 

Airlines baggage fees

 

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.

The recent hike in checked baggage fees helped push 2018 to yet another record high for those fees overall. Yet airlines’ overall net profit dropped in – though U.S. carriers remained in the black for the sixth straight year.

Of course, some airlines rely even more heavily on baggage fees. That’s especially true of budget carriers like Frontier and Spirit, which collected more than $638 million in baggage fees alone last year – almost 20% of its overall revenue. By comparison, baggage fees composed less than 3% of airlines’ revenues as a whole.

 

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.

 

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. But you can beat them at their own game.

 

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Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer.

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