Checked-Baggage Fees May Be Doing You a Favor
Between long lines, totalitarian shampoo restrictions, and the disappearance of in-flight meals, air travel has never felt like more of a hassle. But researchers say one common frustration may be worth it: Their study of domestic flights, published in the journal Management Science, found that charging baggage fees makes domestic flights more likely to depart on time.
The baggage-fee concept began in early 2007 when discount carrier Spirit Airlines started charging passengers for their second checked bag. A few months later, they expanded the policy to include all checked baggage. Other airlines took notice, and by December 2008, almost every major domestic airline had jumped aboard the luggage-fee bandwagon.
Passengers were understandably irritated. Charging additional fees on top of already expensive ticket prices felt like adding insult to injury, and for what? So corporations could squeeze even more money out of helpless travelers?
Partially, yes. In the first year alone, U.S. airlines raked in more than a billion dollars in baggage fees. But listen, the airlines protested as they swam through piles of money like Scrooge McDuck. We’re doing this for your own good. They claimed the fees would discourage people from checking their baggage. With a lower volume of suitcases to transfer between flights, baggage handlers could work faster, thereby getting flights off the ground closer to their scheduled departure times.
Consumers weren’t buying it, a fact the few remaining fee-free airlines decided to exploit. Southwest Airlines launched an ad campaign that declared, “Fees Don’t Fly with Us,” followed by “Bags Fly Free.” Critics argued that discouraging checked baggage would lead to overstuffed carry-ons, which would result in more delays, not fewer.
As it turns out, the fee-positive airlines were right. A team of researchers from four U.S. universities analyzed airline profits, flight delays, and customer service complaints from May 2007 to May 2009 (the period before, during, and after most major airlines started charging fees).
They found that luggage fees reduced flight delays for all domestic airlines—even those that didn’t charge—by 1.3 to 2 minutes. Airlines improved their median departure time between 3.3 to 4.2 minutes. "Because passengers changed their behavior, less weight went into the plane below the cabin," co-author and management expert Mazhar Arikan said in a press 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."
Because flights were more likely to leave on time, the implementation of baggage fees also decreased the number of customer service complaints.
Sadly, Southwest’s smug ad campaigns came back to bite them in the rear compartment. While they did experience a boost in on-time departures, their boost was smaller than other airlines. Anybody with baggage suddenly had an incentive to fly Southwest, and regular Southwest passengers still had no reason not to bring luggage. The researchers say the delays are costing the airline about $59 million each year.
It’s still true that airlines are looking out for their own bottom lines. But in this case, that may not be such a bad thing.
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