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The 5th Anniversary of Airline Baggage Fees

By  +Follow July 29, 2013 8:11AM
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With July coming to a close it marks the 5th year anniversary of US domestic airlines making the shift over to baggage fees. Thought the trend originally started in May of 2008 when American Airlines first implemented baggage fees for all their domestic flights, most other domestic airliners quickly followed in suit making their added fees official in July 2008. 

The original reason for the switch was in response to the rising oil prices that the airline companies faced in 2008. When oil was raised to $100 a barrel there were many airliners that had to make a change to keep their prices competitive while meeting their profit margin. After dubious amount of research, airlines came to the conclusion that increasing the base rates of tickets were driving consumers away, but adding fees such as baggage didn’t have as drastic of an effect. In 2011 there was industry revenue of around $3.4 billion dollars on baggage fees alone. This is not including all the other added fees that many airlines have been adapting. There are now fees for boarding first, extra leg room and even for sitting in the emergency exit seat. 

There are many downsides that have been brought forward by consumers since this change was implemented 5 years ago. There are many who say that the added fees are generating an adversarial relationship with the airline staff as well as diminishing the comfort of flying. There are more people who are over packing carry on bags in the hopes of avoiding the fees then ever before. The overly packed bags are not only tedious to carry around an airport, but hard to stuff into the over head bins as well. There have been many that complain that they are in a constant stand off with the gate attendants and flight attendants as they are tying to see how much they can get away with in terms of their bag size and weight. Keeping all of this in mind its no wonder that airlines having one of the lowest customer satisfaction rating then any other field. 

Though Southwest is one of the last to hold out in terms of adding onto the fees, its only a matter of time before they are going to be forced into changing their policies. Within another five years, baggage and extra leg room fees will be a nonnegotiable normal. 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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By  +Follow July 29, 2013 8:11AM
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