This is why all airlines increase baggage fees, and what you can do to avoid it

Photo source: Wealth of Geeks

By Chhavi Agarwal | Wealth of Geeks

Since January, five of the biggest United States airlines raised their checked bag fees. Most recently, United Airlines hiked checked baggage fees for customers traveling in North America after American Airlines and JetBlue Airways announced similar increases.

The Bureau of Transportation Statistics reports United States passenger airlines raked in more than $7.1 billion in baggage fees last year. In 2022, American Airlines alone pocketed nearly $1.4 billion from checked bags.

Airlines increasingly rely on ancillary revenue streams such as baggage fees because it has become profitable. Those higher costs present an issue for frequent travelers.

Why Do Airlines Do This?

Airlines pay the federal government 7.5% of the ticket price for domestic flights but not for separately itemized baggage fees, a loophole that saves airlines millions annually — around $500 million in taxes last year alone.

An airline charging $300 for a round-trip with a bag included owes $22.50 in taxes but only owes about $16.50 if the bag is a separate transaction. At $40 per trip, processing bag costs separately shaves down taxes, saving the airline $6 per flight. This small saving accumulates significantly, with more than 800 million trips last year. Bag fee revenues skyrocketed in the past 20 years — up nearly 40% in 2023 from just $180 million in 2002.

Additionally, airlines fare well in fuel costs through these fees. There is a direct link between the plane’s weight and expended fuel. The more luggage stowed, the more fuel utilized. With lighter loads and less to lug, airlines ultimately shell out less in fuel costs.

What Can Americans Do?

According to a study by Upgraded Points, overpacking leads to financial stress for travelers. Around one in five Americans (19%) face the unfortunate situation of paying extra for overweight luggage when flying, but leaving some unused clothes behind could save travelers money.

Though paying for overweight luggage isn’t uncommon, overpacking’s financial frustrations remain at the forefront of traveler’s minds. The same study reveals nearly 9 in 10 Americans would choose an airline offering more lenient baggage policies, such as allowing passengers additional carry-ons or complimentary checked bags.

Pack Light

One of the easiest ways to avoid an excess baggage fee is to pack light. Upgraded Points reports that 4 in 10 Americans intentionally overpack, and 40% admit to “often” or “always” returning home with clothes they never wore.

Forty percent of Americans claim they fight to close their suitcases, with travelers from Pennsylvania, Indiana, and Kentucky the most prone to overpacking. This over-preparedness can lead to wasted luggage space.

Travel website xoxoBella’s Bella says, “Traveling light isn’t just about convenience; it’s a smart way to avoid unwanted baggage fees. As a travel blogger, I’ve learned the art of packing efficiently and opting for carry-on only. My top tips? Invest in versatile clothing, roll instead of fold, and consider wearing your bulkiest items to the airport — it’s a surefire way to breeze through without extra fees.”

Consider Other Options

Big airlines frequently charge travelers more for carry-on bags, and experts urge flyers to upgrade their tickets for additional perks like free bags. Upgrades cost about the same as a standard ticket but include bonuses like preferential seating or flight changes.

Melanie of holistic financial outlet Partners in Fire shares, “Southwest allows one free checked bag and a free carry-on. They aren’t on any of the big travel sites, so you have to look on their website for flight routes.” [Editors note: Southwest Airlines actually allows two free checked bags, a carry on and a personal item.]

Travelers can find upgrades by joining airline loyalty programs or simply asking during check-in. They can also improve their upgrade odds by checking airline websites and booking flights with fewer passengers.

Add Bags Early

Prepaying for luggage can save travelers more money and often costs less than at the airport.

Buy Travel Light Gear

Travelers can easily cut costs by purchasing ultralight travel gear. These bags might cost a bit more but will spare frugal flyers the hefty baggage fees.

Alicia of Travel With The Crew prefers light luggage. “I finally invested in backpacks for every member of my family. They are the exact measurement for personal items on every low-cost carrier. We travel light, but we travel cheap,” she shares.

Get a Credit Card

Airline credit cards often offer free baggage or premium tickets that consumers can use when traveling. JayDee Vykoukal of Mom Blog Life explains, “We fly a lot and are always looking for hacks to save money. One of our biggest money savers has been having a United Miles Explorer credit card.

“If I purchase a United flight using my card, which is who we usually fly with, I can get one free checked bag for myself and another member of my party for free. This typically saves hundreds for our round-trip flights. Other airlines offer similar perks with their credit cards, so choosing the one someone would use the most is the trick.”

As the airline industry continues to juggle ancillary revenue and passenger expectations, travelers must remain vigilant in seeking strategies to mitigate baggage fees.

Whether packing light, exploring alternative ticket options, or leveraging loyalty programs and credit card perks, proactive measures can significantly impact the overall cost of travel. By staying informed and adaptable, passengers can navigate the evolving dynamics of airline fees while optimizing their travel experience.

This article was produced by Media Decision and syndicated by Wealth of Geeks.