In Defense of Bag Fees
Atrios comes out against bag fees for air travel.
I have to say I’m not really very sympathetic to this sentiment, or with the current Southwest Airlines ad campaign slamming bag fees. If you figure an airline is going to believe it can acquire a given amount of revenue per passenger from a given route, the bag fee doesn’t actually alter this level, it simply redistributes it from those traveling with no checked bags to those traveling with multiple bags. Nobody is made worse off on average by this. But at the margin bag fees do encourage people to pack less stuff which reduces the weight of the plane and thus reduced fuel consumption and carbon emissions. I wouldn’t want to argue that bag fees are the cornerstone of the new green economy, but it strikes me as a basic illustration of the point that a lot of customary social practices—from the absence of bag fees to poorly insulated office buildings—are ecologically destructive precisely because they’re economically wasteful. There’s some tension between environmental goals and growth goals, but also some elements of parallelism where in both cases it’s better to develop technologies and business practices that let us our capital and resources more efficiently
106 Responses to “In Defense of Bag Fees”
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September 16th, 2009 at 9:18 am
Or it encourages people to carry more bags on instead of checking them, which is also really annoying.
September 16th, 2009 at 9:18 am
I don’t know about this… seems like the bags are pretty ancillary to the primary green house gas emitter: FLYING THROUGH THE SKY AT FIVE HUNDRED MILES PER HOUR.
If the carbon was accurately priced, I would guess the added weight of bags would be trivial… and it seems what you want to discourage is people jaunting from city to city for a weekend with just a carry-on, as opposed to the family of four going to Disneyland for a week.
September 16th, 2009 at 9:24 am
Compliance with checked bag fees carries significant transactional costs. ie, it’s a pain in the ass. Even before airlines imposed the fees, I usually just brought a (small) carry-on and a briefcase or backpack. But my parents are more the “fill whatever space is available” sort of packers, which means they have to agonize over whether they should pay for a checked bag. For them, Southwest’s rule is a panacea, even if it actually INCREASES their total costs, because it relieves them of the burden of worrying about checked bag fees.
September 16th, 2009 at 9:24 am
I’d agree with you if it weren’t for the post 9/11 restrictions on carrying liquids onto the plane. I’m a rabid anti-bag-checker, but if I’m going on or coming back from a vacation and bringing something liquid – say, some wine I bought – I now have no choice but to check the bag.
Why should I be charged a fee for being forced to do something that’s already an inconvenience?
September 16th, 2009 at 9:25 am
Exactly, matt singer. This is especially true since if there’s not room for everyone’s carry-on bags, the late-boarders have their bags “gate checked” for free. So the incentive is to try to stuff everything you can into your carry-on, holding up the boarding and disembarking process and meaning that people who really have to carry-on bags, like those with expensive camera equipment or something, might be screwed if there one of the last to board.
September 16th, 2009 at 9:25 am
It would be better for airlines to charge a carry-on bag fee and make the first checked-in piece of luggage free and put an end to the insane jamming in of overstuffed carry-on baggage in an already crowded passenger cabin.
September 16th, 2009 at 9:26 am
What Matt Singer said – bag fees encourage people to carry on gigantic bags, which is incredibly irritating.
September 16th, 2009 at 9:27 am
Eric: I’ve had that exact problem before. It would be nice if the airlines offered an option to check something small without a fee, perhaps in exchange for one of your carry-ons, which would offset any weight gain. Although presumably the very act of checking carries costs for the airlines? Increased work for baggage handlers and other checked-bag infrastructure?
September 16th, 2009 at 9:28 am
Although presumably the very act of checking carries costs for the airlines? Increased work for baggage handlers and other checked-bag infrastructure?
Maybe…but the airlines didn’t seem to care about this before, given that they used to let you check bags for free.
September 16th, 2009 at 9:29 am
Matt Yglesias, for once in your short life, you are so right.
How about making it the airlines’ call because, well, it’s their airline?
September 16th, 2009 at 9:30 am
> If you figure an airline is going to believe it can
> acquire a given amount of revenue per passenger from
> a given route, the bag fee doesn’t actually alter this
> level, it simply redistributes it from those traveling
> with no checked bags to those traveling with multiple
> bags. Nobody is made worse off on average by this.
Airplanes consume quite a bit of energy while sitting at the gate, either from the airport electrical/cold air system if it has one or from running the APU (a small jet engine in the tail) if the airport is not so equipped or its system is overloaded. Passengers attempting to carry on, stow, find they can’t stow, fight their way to the front, and give bag to baggage handler to be put below when said bag could have been quickly and efficiently checked in the first place but wasn’t due to a fee is going to consume far more energy in the long run as the planes sit at gates longer.
Not to mention the direct “hurt” of being smashed in the face/head by a huge suitcase that never should have been carried on – happens to me quite a bit.
Look – for any given service there is a package of sub-services which follow naturally along. Checking one bag domestic and two bags international is and always was a natural sub-service of “flying from A to B”. Trying to break out the sub-services individually and “monitizing” them is obnoxious enough without faux efficient-market justifications.
Cranky
September 16th, 2009 at 9:30 am
Ditto @1, though maybe that could be solved by being more stringent about carry on bag sizes.
Making you pay for all the beverages after they seize all your liquids annoys me more.
September 16th, 2009 at 9:35 am
If you get reimbursed for work travel, as I do, that’s an extra claim form you have to fill out. As far as self-interest is concerned, I’d rather have it included in the base price. But I see Matt’s point on the environmental benefits.
September 16th, 2009 at 9:36 am
> But I see Matt’s point on the environmental
> benefits.
Except that his calculation is naive at best, and most probably wrong.
Cranky
September 16th, 2009 at 9:37 am
Southwest just added a $10 fee for early check-in. Their self-righteousness is starting to smell.
September 16th, 2009 at 9:38 am
If airlines are justifying bag fees based on the weight of the bags, I want a refund on the 30 pounds less I weigh than the average passenger. That should just about cover one checked bag. And fatties should pay extra.
September 16th, 2009 at 9:39 am
Which as ridiculous an argument as suggesting people be charged more for their seats based on their weight.
Ignoring, of course, that half the people affected here are now simply over-stuffing their bags anyway (Jesus, they sell bags now that let you vacuum-seal your clothes so you can fit twice as much in the same size bag) the airlines calculate the estimated weight based on passenger count and average weight of baggage and figure out the fuel use and cost from there. They’re still assuming the same amount of weight, only now they’re charging for it.
By your logic, they could also just remove two rows of seats, giving everyone more legroom and reducing the carbon/fuel cost whatever because ten fewer people are on each plane, but that’s not exactly cost beneficial for them either, is it?
Personally, I’ve never checked bags, even when they were free. Not because of the cost or need to reduce what I take with me, but because waiting for baggage claim is one of the most annoying and aggravating aspects of flying, second only to the security line. So I’m not really going to be wavered from Atrios’ accurate identification of airline procedures sucking and sucking more every year.
September 16th, 2009 at 9:39 am
I agree this is less about the actual weight penalty and much more about the fact that flying is getting increasingly expensive, and airlines are trying to hide that fact from their customers.
Meanwhile, Southwest was doing great while benefiting from some very fortunate fuel-hedging contracts, but then they took a bunch of losses on their hedges when fuel prices dropped dramatically, and now they just aren’t hedged as much as they used to be and prices have increased again. So we shall see if they can actually sustain this policy.
September 16th, 2009 at 9:40 am
As the other commenters have said, most of the shift is turning checked bag into carry-ons. This is annoying for the traveler who’s carrying on the bag, since they have to limit their liquids and drag their bag around everywhere. It slows things down going through security with more bags going through, and for passengers getting on & off the plane with more people having bags in the overhead compartment (or gate checking their bags, depending on the plane). It puts overhead compartment space at a premium, possibly forcing some bags to get bumped to checked baggage (which slows things down even more). I guess they save some on baggage handlers, but that’s not an environmental issue (unless you count a slight cutback on baggage vehicles roaming the runways).
September 16th, 2009 at 9:41 am
Also, if this was all about the weight and fuel consumption, then extra bags should be weighed and charged by the pound, not a $25 flat fee each time.
September 16th, 2009 at 9:42 am
Yeah, I’m with Matt on this one. It doesn’t really matter if there are any environmental benefits — bag fees are just a further step in the unbundling of services that used to be included in the plane ticket price. We used to pay for incredibly shitty meals that were covered in the price of our tickets. Now we bring our own (better) food on, and pay less for travel. Basically people want cheap travel. Bag fees are the price of that desire. I can live with it.
September 16th, 2009 at 9:42 am
it strikes me as a basic illustration of the point that a lot of customary social practices — from the absence of bag fees to poorly insulated office buildings — are ecologically destructive precisely because they’re economically wasteful.
But Matt, poor people have a God-given right to free/cheap parking and super cheap gas!
September 16th, 2009 at 9:42 am
If this is really about covering the airlines’ fuel costs, how about a fixed charge for the seat, plus a per-pound charge for your luggage, carry-ons, dogs… and person? (There would be a volume limit on luggage I suppose.) If you weigh 300 lbs, but don’t bring a bag, you would pay the same as a person who weighs 200 lbs and brings two 40 lb bags and a 20 lb carry-on.
But my intuition is that bag charges actually aren’t about fair pricing of costs. It’s just price discrimination, like charging $3.50 for pop at the movies to extract a few extra bucks out of people who are willing to pay more.
September 16th, 2009 at 9:46 am
I love the suggestions to charge customers based on weight; I’m so sure men will be thrilled to pay, on average, more than women. Great idea!
September 16th, 2009 at 9:48 am
Here’s yet another person who agrees with Matt Singer. It’s a pain trying to shuffle around peoples’ suitcases in line, squeeze my backpack or (barely half-full) duffel bag into the tightly-packed overhead compartment, not have all the other suitcases fall on me when we load and unload, etc. You say that at the margin bag fees encourage people to pack lighter, but then again they also encourage people to take briefer, and therefore more, trips, like the weekend jaunts J.W. Hamner complains about.
September 16th, 2009 at 9:51 am
As others have pointed out, this only makes sense if you start charging for carryons, too (presumably at a higher rate). People would balk at that, of course, but it could be offered as a rebate (just like how the grocery store credits you a nickel for bringing your own bags).
How about making it the airlines’ call because, well, it’s their airline?
To me, this isn’t a very compelling argument. The air industry has been bailed out so many times that most people have lost count. Deregulation has been a mixed bag, but has inarguably introduced a race-to-the-bottom dynamic that’s leading to decreased system efficiency and increasingly frustrated passengers. People aren’t very good at pricing that frustration, but I’d be happy for a small, crowd-pleasing paternalistic intervention. If it drives up ticket prices five bucks, so be it — so will the next ticket surcharge when my municipality decides the airport needs a new food court (or whatever). (Yes, I realize this makes me an abominable member of the callous overclass.)
September 16th, 2009 at 9:51 am
Carbon emissions have nothing to do with it–the sentiment is about good business sense and attracting and maintaining customers.
September 16th, 2009 at 9:52 am
Personally, I’ve never checked bags, even when they were free. Not because of the cost or need to reduce what I take with me, but because waiting for baggage claim is one of the most annoying and aggravating aspects of flying, second only to the security line.
I’ve always thought one of the most annoying and aggravating aspects of flying is having to deal with getting on and off the plane ridiculously slowly thanks to people who carry on luggage they should have checked.
September 16th, 2009 at 9:53 am
If you figure an airline is going to believe it can acquire a given amount of revenue per passenger from a given route, the bag fee doesn’t actually alter this level, it simply redistributes it from those traveling with no checked bags to those traveling with multiple bags. Nobody is made worse off on average by this.
Yeah, what a great idea. And hey, maybe we could introduce this for subways and taxis as well….wouldn’t it be great if the subway or your cab driver charged you a fee for each bag you carried on? Why, I’m sure the green benefits would more than outweigh the INCREDIBLE HASSLE AND SMALL-MINDED SCREW THE CUSTOMER AT ANY COST STINGINESS…..
September 16th, 2009 at 9:54 am
I suspect that the major environmental benefit from this will come from increased numbers of people giving up on air travel.
September 16th, 2009 at 9:54 am
Also, this thread seems to reveal that every airline passenger is annoyed at every other airline passenger.
September 16th, 2009 at 9:55 am
Airline fares exist in a weirdly irrational psychological zone where one might choose the $235 flight from DC to SF over the more expensive $248 flight. But the $235 flight is routed through Houston AND St. Louis, so you’re traveling for 11 hours vs. 7 or so. It takes a little effort to snap out of the haze and pick the better flight for the cost of a light lunch.
So it’s quite a shock to check in and get whacked with an extra $30.
I was checking in recently and the party next to me had 5 or 6 bags to check. I don’t remember the airline, but the total for the bags was more than a seat.
Best recent thought on air travel here:
http://www.youtube.com/watch?v=WXStPqhLmIk
September 16th, 2009 at 9:57 am
Also, this thread seems to reveal that every airline passenger is annoyed at every other airline passenger.
I suspect sardines feel the same way.
September 16th, 2009 at 9:57 am
Eh, just stay home folks, don’t fly. Do you really need to?
September 16th, 2009 at 10:00 am
Also, people need to learn how to pack light.
I work at a hotel and you would not BELIEVE the amount of crap I’ve seen people wheel in for their two night stay.
September 16th, 2009 at 10:03 am
Airline fares exist in a weirdly irrational psychological zone where one might choose the $235 flight from DC to SF over the more expensive $248 flight.
Bingo. At the point of ticket purchase, people are focused on one particular number (and the advent of online self-booking has made this effect very robust). So I have little doubt that as annoyed as passengers get at the point of paying the fee, the airlines have found that this annoyance isn’t sufficiently anticipated at the point of ticket purchase.
Now of course maybe this is a revenue-maximizing scheme in the short run but it is going to cost the entire industry revenues in the long run. But that is hardly a unique situation for airlines, or indeed competitive industries in general.
September 16th, 2009 at 10:07 am
I travel a fair amount, for work and play, and the main variable for me is not my packing style but the length of my trip. Try going somewhere to work in a business setting for two weeks without checking a bag. I figured this new development was the airline equivalent of gas stations (self-serve) and grocery stores (self-checkout) of getting the customer to do the work so that they can cut staff. Cynical me.
September 16th, 2009 at 10:09 am
Yeah, the point of all these various extra fees is to decrease ticket prices so people buying on price won’t notice until it’s too late. It’s just not true that no one is hurt by this–consumers are hurt because hidden fees distort markets, encouraging airlines to focus on deceiving the consumer over reducing costs or increasing benefits. And the end result is to make flying more complicated and annoying. Which is likely to bring far more environmental benefit than any effect of reducing baggage.
September 16th, 2009 at 10:11 am
The major issues with bag fees are:
1. The airlines charge different prices, so you have to look up their stupid fees (not always easy) to meaningfully compare ticket prices.
2. Do you reallyv think it’s in everyone’s interest, in terms of security, to increase carry-on? I am dubious.
It’s what they call a “hidden” cost. It just makes the whole process even a little more grimey, reducing one’s interest in flying a little bit more.
I don’t really care. i still fly enough (50k a year) that I rarely get charged. However, I fly about half as much as I used to because the whole thing has become, like many things in America, of infinitely crappier quality.
September 16th, 2009 at 10:11 am
Charging for checking backs is like charging for bread at restaurants: bush league.
I don’t think we’re actually paying less.
While I’m not the ‘bring four suitcases’ kind of traveler, my packing philosophy is to pack as if you might never come back.
September 16th, 2009 at 10:12 am
anon says: “I love the suggestions to charge customers based on weight; I’m so sure men will be thrilled to pay, on average, more than women. Great idea!”
Men currently pay more for food than women (since being bigger requires more calories). Maybe we should charge a flat fee for the day’s food to eliminate this unfair system.
September 16th, 2009 at 10:16 am
Consumatopia @12 wrote: “Ditto @1, though maybe that could be solved by being more stringent about carry on bag sizes.”
When I start my airline, you will be allowed to bring anything you want as a carryon. However, next to the gate there will be a device somewhat like a trash compressor, and every piece of luggage will be passed through that, ensuring that it does indeed fit under the seat in front of you.
(Anyone want to do a thread of carryon horror stories? I’ll begin: Golf clubs. Not, mind you, one or two clubs; the whole bag. I’d been staring at the guy at the gate, and thinking “Surely they won’t let him try,” but they did.)
September 16th, 2009 at 10:16 am
I am not sure I see any specific benefits to any travelers from charging for luggage. There is no evidence that it lowers fares for non-checked baggage customers; it could simply make their trip appear to be cheaper and function as an add-on profit. If convenience were ever a motive, allowing one free checked bag and charging for additional bags makes sense. It removes the incentive to overstuff carry-on bags to save $15 (or more).
I have no idea why the airlines don’t just create a class of fare called a “luggage seat” that is $25 more than a regular seat and allows a specified amount of luggage. Buy the ticket amongst your choice of coach, business and first class from Expedia or Orbitz, etc. All this at the airport crap is what is most annoying.
September 16th, 2009 at 10:17 am
I think baggage fees are just a conspiracy to free up space in the hulls so airlines can ship freight.
September 16th, 2009 at 10:19 am
I don’t think we’re actually paying less.
It depends on your point of reference. Marginal costs have gone up in the industry so it is true passengers are necessarily paying more overall. But you are paying less specifically in ticket prices than you would have been if they weren’t getting new revenues from these other charges.
September 16th, 2009 at 10:22 am
There is no evidence that it lowers fares for non-checked baggage customers; it could simply make their trip appear to be cheaper and function as an add-on profit.
The evidence it isn’t increasing profits comes from the bottom lines of the carriers. They are trying to cut losses right now, not increase profits, and if they weren’t getting these revenues they would have to look at increasing ticket prices.
September 16th, 2009 at 10:23 am
Another good reason to get high speed rail operational. Weight and space constraints are far more important if you are doing the trip at thousands of feet up in the air.
Large amounts of what is now air travel could be done just about as well on a good high-speed rail network, with resulting improvements in carbon emissions and less need for intrusive security.
September 16th, 2009 at 10:26 am
this is principally a revenue issue — what the airlines call “ancillary fees” are a new source of revenue in an economic environment that has only worsened revenue prospects for airlines. In addition, the various fees are not subject to the ticket tax (which, along with the generally lower fares and reduced passenger numbers, is cutting into the Airport and Airway Trust Fund which funds most of FAA and air traffic activity in the US). Airlines have found that insufficiently few passengers are willing to pay for the standards of service they believe themselves to deserve. No surprise there.
One comment above claims that the fees will only lead to greater waste of fuel “in the long run” as it takes longer for passengers to board. Since airlines are the ones paying for the fuel/energy, I expect they’ve thought that one through a bit. An easy solution would be to commence boarding a bit earlier.
September 16th, 2009 at 10:29 am
why would there be “less need for intrusive security” for HSR? A well placed whack to a HSR system could easily be more consequential for infrastructure recovery than a whack at an aircraft, although perhaps with lower loss of life.
September 16th, 2009 at 10:36 am
MY: I think we need to disabuse of two notions- the opportunity cost of that extra bag probably renders that luggage green friendly. Moreover, who is to say that the extra space is not been sold, afterall it does represent a service commodity. Atrios main point is convenience. Fundamentally, I agree with your premise, the question is if the hassle is really worth it and are there better means to extract the rent.
September 16th, 2009 at 10:39 am
Is it possible, Matt, that you are consistently overlooking the noneconomic cost of added fees?
As with congestion charging, bag fees inflict pain on the consumer out of proportion to their actual dollar figure.
Compare it with the western MMO marketplace (as opposed to the Asian one), where consumers have, historically, preferred to pay a flat monthly rate for a game rather than use a free-to-play model supported by freemium add-ons.
The sensation of being nickled-and-dimed is unpleasant in excess of the actual value of the nickles and dimes in question.
September 16th, 2009 at 10:40 am
One of the reasons that airlines don’t want you to check bags is that it means that they don’t have to pay for as many baggage handlers. Same with self-service check in and counter staff.
Every bag you don’t check brings somebody closer to unemployment.
September 16th, 2009 at 10:45 am
Airlines have found that insufficiently few passengers are willing to pay for the standards of service they believe themselves to deserve.
We are all Californians now.
September 16th, 2009 at 10:46 am
AVS, airlines are happy to pay baggage handlers but they need revenue to pay them with. That has been the problem — inadequate revenues, not an aversion to specific types of cost.
September 16th, 2009 at 10:47 am
Gotta admit the bag fees bug the hell out of me. Wrestling with one big, heavy suitcase while traveling is a much bigger pain in the neck than carrying the same stuff in two smaller, lighter suitcases. It would be aggravating to have to pay extra to do the latter. Fortunately, the vast majority of my domestic travel is on Southwest.
And I’m with Matt Singer up at the top of the thread: one side effect of rules like this will be more people pretending that their smaller suitcases are really carry-ons. It already really annoys me that people bring bags on board that take up most of an overhead compartment by themselves, and that the airlines let them.
I think there should be a simple rule regarding carry-ons: if a carry-on is big enough that two such carry-ons wouldn’t fit in one overhead bin, then you’ve got to put it in checked luggage.
September 16th, 2009 at 10:49 am
why would there be “less need for intrusive security” for HSR? A well placed whack to a HSR system could easily be more consequential for infrastructure recovery than a whack at an aircraft, although perhaps with lower loss of life.
Perhaps, but you can’t prevent that by screening the passengers at embarkation. Railroads are less vulnerable to what passengers bring on board than they are outside the cars, along the tracks or the bridges and tunnels they pass through.
September 16th, 2009 at 10:49 am
“But at the margin bag fees do encourage people to pack less stuff which reduces the weight of the plane and thus reduced fuel consumption and carbon emissions.”
lol
September 16th, 2009 at 10:59 am
@stefan 56. fair enough.
September 16th, 2009 at 11:00 am
> AVS, airlines are happy to pay baggage handlers
> but they need revenue to pay them with. That has
> been the problem — inadequate revenues, not an
> aversion to specific types of cost.
Bit of a problem here: airlines’ “inadequate revenues” are the result of structural features of the industry that cause just about every player to engage in suicide pricing. That also attracts people to the industry who like playing such games and they become very clever at figuring out new and more efficient ways to play chicken, but the fundamental problem is structural. This is one of the few industries where an Econ/Business 301 analysis actually gives a correct and accurate picture of the industry – yet MY’s proposed solution is more Econ 101 “markets are perfect; let’s unbundle everything”. Hmmmm….
Cranky
So for Southwest and Ryanair have managed to avoid the standard suicide games. Although both have been around long enough to be declared a success, their situations are clearly unstable equilibria and could implode quickly at any moment.
September 16th, 2009 at 11:01 am
I’m with David W. Carry-on fee. Enforce a super tiny ‘purse’ exception and charge for anything else. No exemption for dogs and strollers, but exemptions for mobility devices such as wheel chairs and canes. No exemptions for laptop bags, exemptions for the actual laptop.
September 16th, 2009 at 11:02 am
I would have no trouble with the airlines charging fess for checked bags if they would pop up when I’m looking for flights on travelocity. Somehow I doubt any of the airlines that have started charging would be eager to comply. As others have noted, this is not about creating a more efficient market. This is about extracting money from customers with hidden fees they don’t find out about until they’re locked in.
September 16th, 2009 at 11:02 am
I lol along with vg, and also note that the margin cuts both ways. If a passenger knows he/she is going to need to check a bag and incur the fee, why not fill ‘er up and pack more. this has the opposite effect, again at the margin. (and actually it’s not much of a margin, it’s a pretty lumpy situation: pay X or don’t pay X, rather than pay X or pay X + epsilon)
September 16th, 2009 at 11:04 am
why would there be “less need for intrusive security” for HSR?
Aside from what Stephan said, trains can’t go anywhere that there aren’t tracks, so no one is going to use a train to bring down the Sears Tower.
If you’ve compared the experience of boarding a train with that of boarding a commercial aircraft in recent years, the differences are dramatic.
September 16th, 2009 at 11:04 am
How about making it the airlines’ call because, well, it’s their airline?
To me, this isn’t a very compelling argument. The air industry has been bailed out so many times that most people have lost count.
Don’t feed the troll. Neither atrios nor Matt nor anyone else had suggested any kind of regulation before the Randian moron you’re replying to. This is generalized griping (myself included, of course), or tips for an imaginary airline’s customer service hotline, which in Matt’s case is considered at least in part in macroeconomic terms because he’s a policy geek. However, as much as Bob Roddis would like it to be about collectivism or the heavy hand of regulation or whatever, he’s the only person who brought them up.
September 16th, 2009 at 11:09 am
Cranky — agree that it is structural, but that’s simply a fact of the situation (which has a demand side aspect as important as any cost considerations, if not more important), not “a bit of a problem.” Ancillary fees are one attempt to square this circle. Southwest and Ryanair were often the instigators of the suicide games (along with other low cost carriers that are now gone or have merged into some other form); now they’re part of the status quo. Southwest is now facing many of the same labor cost issues that challenged the “legacy airlines.”
The process we’re seeing is just the slow playing out of the economic deregulation of the airlines in 1978, made worse by the economic situation.
September 16th, 2009 at 11:11 am
jimBob, the infrastructure is the vulnerability, not some building. I board a train quite frequently, thank you. Don’t pet the nice security dogs.
September 16th, 2009 at 11:13 am
The bag fees don’t bother me per say. What bothers me is the combination of bag fees and the “security” rules limiting gels and liquids (and empty containers that could be filled with a liquid). You HAVE to check a bag if you bring a full sized toothpaste and to check a bag cost $25. It seems that the security rules drive more people to check bags while the fees encourage people to pack less and bring carry on bags.
September 16th, 2009 at 11:23 am
Bag fees are painful for anyone travelling with small children.
September 16th, 2009 at 11:38 am
The bag fees are only a way to cheat customers. Because you know actually they are not some hyperrational homo oeconomicus, so showing them a low entry pricetag works. The low cost airlines in Europe actually had a point with their bag fees (even so they certainly also love the trick the customer aspedct), because they really care about the lower costs from no check in lugage and built their concept arround low turnover time/low staff level so they actually save money like that. For a typical US Airline, that check in fees wont save lots of money. Its hilirious that the discount airline is the one that markets itsself with no baggage fees
. They are the ones that would actually profit from a baggage fee.
September 16th, 2009 at 11:45 am
I think this un-bundling of traditionally rigidly bundled services is great for consumers.
Before deregulation, the fare was tightly regulated,, so a bunch of services/cost were added on without regard to their actual utilities to consumers. With deregulation and modern computer technology, those added costs gradually being stripped out and people can choose to pay for what they value. Of course, under the old model, there had been some cross-subsidization. So any rationalization will have winners and losers in the short term. But long term, the more transparent pricing for all options will benefit consumer.
I think Asian and European low-cost carriers are much further along in this direction, every low base fare and add-on costs for everything.(c.f. Rynair’s recent plan to charge for toilet usage on air.)
For myself, I got allowance for two free check-in baggage with my frequent flyer program elite status. In adition, my elite status allows for priority boarding.(Which gives me first crack at overhead bin before the masses) So I am incentivized to fly enough to maintain my elite status.
September 16th, 2009 at 11:45 am
If you fly often, at least with Delta, you don’t pay for bags anyway. This is a tax on people who don’t fly so much. I would like to see less carry on, a fee for that would be fine with me. If you don’t fly that often then nailing you with a bag fee is less likely to cause the airline to lose you as a customer as you are not much of one anyway. It has always been this way, fly a lot and they make flying easy, but you are not home much. Fly a little and it will be more of a hassle, but you are home a lot more. I hit Million Miler in the next 3 or 4 years, want to trade life styles with me?
September 16th, 2009 at 11:48 am
Jeff J: Bag fees are painful for anyone travelling with small children.
I would expect so. I’ll be traveling with a kid for the first time in a few weeks – on Southwest, fortunately – and I’d much rather have his clothes and things in a small suitcase of their own, rather than packed together with my and my wife’s clothes. It’s a simple convenience issue. And I’m glad I’ll be on an airline that doesn’t want to charge me for that.
September 16th, 2009 at 11:56 am
One issue with bag fees that I saw mentioned months ago but haven’t seen much or recently or in these comments on Matt’s column is their impact on on-line comparison shopping of alternative flights for the same route. It is my understanding that when you try to price alternatives, you get only the base fee for the flight. The greater the gap between the base fee and the normal total cost (and a bag fee for the first checked bag would qualify), the more the information for comparison shopping is distorted so as to favor airlines with lots of separate fees of significant size.
September 16th, 2009 at 11:58 am
I very much agree with heaterjw (67). I have a complexion that is skin cancer waiting to happen. I am not allowed by the TSA to bring anything resembling a reasonable amount of sunblock in my carry on. Either baggage price should be built into the ticket cost, or the liquid rule should be rescinded. Preferably both.
September 16th, 2009 at 12:01 pm
I like the idea of unbundling, I’d just like it to be a bit more transparent.
These days, you can structure an online invoice just about any way you want. Ticket base price and add meal, headphones, checked baggage, pillow, foot rub — whatever special items they want to charge extra for. Just do it at point of sale and eliminate unwelcome surprises.
September 16th, 2009 at 12:05 pm
For myself, I got allowance for two free check-in baggage with my frequent flyer program elite status. In adition, my elite status allows for priority boarding.(Which gives me first crack at overhead bin before the masses) So I am incentivized to fly enough to maintain my elite status.
Which rather cuts down on Yglesias’ original “green” argument, since as you are incentivized to fly more you thereby consume greater than your average share of energy resources and impose pollution costs on others — in fact, since you fly more, an argument can be made that you should pay more, rather than less, to compensate society for the pollution/energy subsidy you are otherwise receiving.
September 16th, 2009 at 12:07 pm
Liam,
I happen to think the liquid restrictions make more sense than confiscating swiss army knives and the like. The threat of liquid explosives is genuine, and to dismiss it makes it a casualty of overblown hysterics over nail clippers.
Pack lighter and buy a jug of sunblock when you land.
September 16th, 2009 at 12:08 pm
Which brings us all the way back to Atrios’ original comment:
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http://www.eschatonblog.com/2009/09/because-flying-really-sucks.html
Obviously the recession has much to do with it, but I do wish it would occur to our great captains of the airline industry that one reason people are flying less is that it the experience has become so incredibly shitty. Some of this is not the fault of the individual airlines, such as stupid security theater, but plenty of it is. I mean bag fees, what the fuck? And it isn’t simply the money, it’s the extra hassle and just general sense of being screwed and harassed throughout the entire process.
==========
I’m afraid its a bit of a lost cause to try to convince me that adding a $10 “bag fee” to a ticket priced at $200 when the cost of providing that service plus a reasonable profit is $300 is going to help the airlines in any way in the long run. What it does do is enrage the customers, who then have even less consumer loyalty than they would have otherwise, causing them to price-shop even harder, and so forth.
Similarly, as explained in detail in this thread adding the bag fee triggers off many additional costs down the line. Some of those costs are born by the customer in terms of physical injuries and overall delays leading to additional consumption of their personal time, but other costs, such as additional APU fuel, are born by the airlines themselves.
Cranky
September 16th, 2009 at 12:22 pm
more liners
September 16th, 2009 at 12:22 pm
The hassle of checking bags doesn’t go away if you’re checking them. There’s just the matter of paying the fee for lugging the bags for you. That may seem onerous or be disagreeable, but I don’t see how there’s much additional “hassle” involved. I don’t think any other “additional costs down the line” have been explained or shown to exist, they’ve just been fancifully asserted.
What would piss me off would be for the airline to lose the bag that I’d paid them to lug for me.
September 16th, 2009 at 12:26 pm
> I don’t think any other “additional costs down
> the line” have been explained or shown to exist,
> they’ve just been fancifully asserted.
I’ll disagree, since I did discuss them, but whilst at it I will note that you have not in any way shown that adding $10 garbage fees that enrage customers in any way helps the profitability of airlines trapped in suicide pricing, just fancifully asserted that they do.
Cranky
September 16th, 2009 at 12:29 pm
It does two things:
– slows down the check in process for everyone who has to wait in the line for any reason
– encourages people to push the limits with carry on bags (I’m guilty of this myself)
It would be far simpler for the airlines to just bump tickets by N cents per mile (or maybe a flat $20 or something) and call that a bag handling fee. It would reduce wait times, and make the entire process more pleasant.
September 16th, 2009 at 12:30 pm
I should had added “maintain status with at least one airline.” I know plenty of people who fly as much as me, in term of flying mile per year, yet they have no status with any single airline because they choose cheapest tickets every time and spread they flying across different airlines. Depends on people’s flying patterns, it makes senses for some of them to consolidate their flying with one single airlines, for some not.
My elite statuses lowers my per-trip cost somewhat. But to obtain/maintain them, airlines receives additional revenues from me compare to once a year flyers. I am willing to pay (within limit) higher fares on the airlines I have status with. To use some of the “free” upgrades, I have to hunt for certain higher fare basis, etc. I am sure the airline had run plenty of analysis on the cost-benefit of frequent flyer loyalty programs and tweak them to make sure they came out ahead.
September 16th, 2009 at 12:31 pm
After 9/11 I started checking all my luggage. Yeah, waiting at baggage claim can suck (but it is actually pretty fast these days), but lugging around a suitcase is annoying for me, annoying for other passengers, annoying for the flight attendants, and annoying for the other people in the airport. There’s really no utility in it. Or at least there wasn’t until they started charging me to check a bag. Now every trip involves some calculation of whether the check fee is worth the hassle to me and everyone else of carrying luggage around.
September 16th, 2009 at 12:35 pm
I think #44 may actually be closest to the mark. My understanding is that passenger airlines also carry a fair amount of commercial cargo, and thus the bag fees are likely a response to squeeze as much efficiency as possible out of the avaiable cargo space. (In other words, pricing most checked bags at $0 actually costs the airline revenue because UPS or couriers or whoever would be willing to pay them for that space.)
I agree that it’s incredibly annoying as a consumer but it does pose an interesting comparison with, say, congestion pricing, where the payer of the fee is also paying to offset the costs of their behavior.
September 16th, 2009 at 1:25 pm
bb — because passenger aircraft run on schedules geared to passenger service and greatest possible aircraft utilization during the flying day, it’s rarely the case that a full belly load can be taken on, and in recent years this is complicated further by changing security issues related to belly cargo. While a very sizable share of air freight is carried in passenger aircraft, this revenue is a byproduct for airlines.
Here’s an industry view of ancillary revenue. I assure you airlines think about the additional costs that might be on the other side of such revenue efforts, especially those having to do with fuel usage. The APU story was amusing.
September 16th, 2009 at 1:38 pm
Revenue from transporting cargo has always been a part of the airline industry. Arguing that airlines should transport your stuff with a less transparent fee structure is either A) arguing for a free lunch, B) arguing for less transparency or C) both. And yes your bags are cargo.
September 16th, 2009 at 1:40 pm
People are just annoyed with all the fees for everything, and the addition of many fees to flight all at once for things that were free before. On a side note, there seemed to be a couple years there where everyone was charging new fees all of the sudden. Thankfully that has subsided.
I think if people were given a slightly lower rate and then charged a fee for checked bags, they would be ok with it, but the rate staying flat and new fees implys that the consumer is just being gouged.
Airline’s inability to manage themselves properly is legendary. People being pissed about it isn’t new either…
September 16th, 2009 at 1:42 pm
“But at the margin bag fees do encourage people to pack less stuff which reduces the weight of the plane and thus reduced fuel consumption and carbon emissions.”
Yep, people pack less stuff and ship it on a seperate plane by UPS or Fed Ex. I’m sure their planes are better for the enviroment.
September 16th, 2009 at 1:49 pm
A plane full of passengers AND luggage is often over the max. weight requirement for operation. As airlines have tweaked their route schedules to be more full, the baggage space has gotten tighter. Bag fees are an obvious business solution that addresses the need to make money with the need to run flight operations. It’s not any kind of conspiracy.
People arguing otherwise are recasting themselves as Johnny Jetway in the age of Pan Am. Good luck with that adventurer.
September 16th, 2009 at 2:05 pm
One of my aerospace jobs was with a company that was a major supplier of flight hardware to Southwest Airlines. Periodically, groups of employees would be chosen at random to take “good will” trips to our major customers. I got chosen in 1990 to take part in a “good will” trip to Southwest.
Southwest sent a 737 to our location to pick up a plane-load of us, and we flew to Love Field in Dallas for a tour of their headquarters. As part of the tour some of us went into the big conference room where the Board of Directors had their meetings.
While we were in there, the founder and then CEO of Southwest, Herb Kelleher, wandered into the room. We recognized him as he had given a short welcoming speech to us earlier. As I was closest to him, he turned to me and with a friendly smile said, “Hey fellow, what did they charge you to get in here?” I replied with a weak sally, something to the effect that I hadn’t been charged to come in, but maybe I should be worried about paying to get out.
Kelleher laughed at that, and then proceeded to tell us a story that Southwest had considered on their LA – Oakland routes letting people fly for free but charging for their bags. You have to remember this was 1990. We all laughed (including Kelleher) at what a silly joke that was.
September 16th, 2009 at 2:48 pm
@DTM flying is getting increasingly expensive, and airlines are trying to hide that fact from their customers.
I think that psychologically it would be easier to take the fee (that is, it would be better-hidden) if it were added to the ticket up-front. Have everyone pay for 1.x bags of stuff when they buy the ticket.
Unrelated: They ought to weigh the bag plus the person. I came back to the US recently from time abroad in Europe. Holy crap are Americans huge.
September 16th, 2009 at 3:00 pm
Airlines have found that insufficiently few passengers are willing to pay for the standards of service they believe themselves to deserve.
We are all Californians now.
Now you know were Reagan got it from.
Actually, Californians are more willing to pay taxes than it seems. Bond measures requiring 2/3 votes still pass with some regularity. The actions of the legislature really don’t reflect accurately the will of the people.
September 16th, 2009 at 3:08 pm
These “quirky” posts are where Matt always does his crappiest work. By this logic, we should also charge passengers by the pound b/c it will help people lose weight, and thereby save the environment. Except that the fat-charge actually makes more sense as a behavior modifier in many instances, despite its obvious limits. For example, due to the infinite wisdom of our post-911 screening methods, if you’re a woman with curly hair, and therefore you need to carry certain products with you at all times to avoid looking homeless, you are simply paying a tax for not being straight-haired and able to let your hair go for a few days, no matter how light you may otherwise pack.
September 16th, 2009 at 3:12 pm
But at the margin bag fees do encourage people to pack less stuff which reduces the weight of the plane and thus reduced fuel consumption and carbon emissions.
Average empty weight of a mid-sized version of the Boing 737 (as used by Southwest airlines): 70,000 lbs
http://en.wikipedia.org/wiki/Boeing_737#Specifications
Weight of 160 passengers/crew, average weight 150lbs/person: 24,000 lbs.
Weight of 150 bags @ average 25 lbs each: 3,750 lbs
Total weight of plane: 97,750 lbs
And most planes also carry air freight, so the plane weighs in at over 100,000 lbs of which less than 4,000 lbs is passenger baggage.
I think that baggage is one of the less significant contrinbutions to the rate of fuel burn. The airline would probably save more fuel (and thus money) by installing blended winglet at the next service overhaul.
September 16th, 2009 at 3:39 pm
Bag fees are another bait and switch tactic by the airlines. They slow the check in line and encourage people to do annoying things like overstuffing suitcases right up to the last ounce of weight limit, do laundry on vacation, and carry more through the security charades.
But the biggest pain of all is the extra hour it takes to bargain shop for a flight, because the prices they advertise are dishonest.
September 16th, 2009 at 3:52 pm
“Yep, people pack less stuff and ship it on a seperate plane by UPS or Fed Ex. I’m sure their planes are better for the enviroment.”
This kind of comment makes you realize that people are just against the bag fees because they’re annoying (which they are), and then simply refuse to consider any argument in favor of them. I don’t know a single person, as far as I know, who has ever had luggage shipped to their destination, but here you are pretending like so many people do it that it completely offsets the benefits.
Do you really think that no one is taking less stuff as a result of these fees? Of course people are. That’s just common sense.
September 16th, 2009 at 4:45 pm
I don’t know a single person, as far as I know, who has ever had luggage shipped to their destination,
I’ve done it.
But then again, it was mainly sex toys for vacation. Some things you just don’t want TSA security poring through…..
September 16th, 2009 at 7:14 pm
Agreed with all of the above regarding the confluence of checked baggage fees and liquid restrictions. I fly at least twice per week for work, usually more. Even though I get those checked baggage fees reimbursed, it still pisses me off every time that “$20″ pops up during check in.
I can easily pack a week’s worth of work clothes in a carry-on (three shirts, two pairs of pants . . .that’s why hotels have laundry rooms), but I wear contacts and they don’t even sell “3oz or less” sized bottles of saline solution.
September 16th, 2009 at 7:31 pm
So carry-on bags are weightless? If the justification is that it costs fuel to haul the shit, charge fees for ALL the shit, per pound, regardless of whether you stuff it in the overhead compartment or in the guts of the plane. A pound is a pound regardless of where it sits.
In fact, while we’re at it, lets also introduce frequent flier fees. After all, encouraging people to fly a lot wastes fuel and increases global warming. We should use economic incentives to encourage business travelers to combine trips and fly fewer miles. Right now, they’re costing the airlines money by flying too much.
And by all means lets make sure that NONE OF THESE FEES ARE ANNOUNCED WHEN YOU BUY THE GODDAMN TICKETS because we wouldn’t want anyone to die of a heart attack when they find out that what they paid to fly is actually all that they paid to fly.
September 16th, 2009 at 7:51 pm
I don’t know a single person, as far as I know, who has ever had luggage shipped to their destination, but here you are pretending like so many people do it that it completely offsets the benefits.
I’ve known a few people who’ve done that, but they were going on multi-week long trips, so they would have shipped part of their luggage anyway regardless of checked bag fees.
September 16th, 2009 at 9:50 pm
Matt, I don’t think anyone else has commented that the a la carte fees are a way for airlines to avoid giving up some of their revenue to the United States. Airline tickets carry a 10% excise tax which funds such things as Air Traffic Control and airport facility maintenance and upgrades. Every dollar that is subtracted from the price of the ticket and diverted to other fees is 10 cents less to the US, as the “optional” fees are not covered by the ticket tax.
So even if the consumer pays exactly the same price for a ticket including baggage or a lower priced ticked plus a baggage fee, the airline keeps more of the latter, while we taxpayers get less. I assure you that over millions of embarkations per year, these small amounts add up.
I did read that Congress was planning to look into this practice. Don’t know if it’s happened yet.
September 16th, 2009 at 10:35 pm
4Corner, since I stumble across yours as the last comment, I’ll note that I mentioned that fact about fees earlier. The ticket tax is 7.5%, and there are also a couple of fixed segment fees for the Trust Fund and TSA. Larger airports also charge fixed passenger facility charges of up to $4.50 per passenger.
September 16th, 2009 at 10:48 pm
Campesino above tells a good story, and mentions Herb Kelleher of Southwest. I don’t think it detracts from Kelleher’s role and standing in commercial aviation to note that a co founder of Southwest was the late Lamar Muse, who arguably crafted the sharp business insight of Kelleher and others into a workable airline proposition.
September 16th, 2009 at 11:52 pm
What sort of nutso logic is this? It is more green not to carry luggage? Shall we purchase clothing at our destinations, and then throw it away before returning–how green is that? Or, shall we travel by air only when we are going somewhere for just a day or two, and can remain in the same rumpled outfit the entire time? Because if you’re going to burn all that carbon, it might as well be for a short trip instead of a long one. The line between carry-on and checked bag depends on a lot more than just whether you could get by with a few fewer items. Having to go through all this other stupid trade-off business–bag fee, waiting for checked luggage, getting through security, is just a pain. You would just like to get from A to B with your stuff.
But as annoying as the bag fee is, don’t even get me started on all this stupid security song and dance we’re going through so we can all pretend we’re safer, undressing in the security line. Kool-aid central, and a huge waste of time.
September 17th, 2009 at 1:23 am
The cheapo European airlines have long charged for checked bags, but they do it up front when you buy your ticket (always online), so everything is clear. Further, they also tell you at the time of booking that the charge is more than doubled if you don’t pay at booking time (10 euros up front or 22 at the airport).