The case for checked bag fees

Hey, big spenders.
Hey, big spenders.
Image: Reuters/Mike Segar
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Flying is not the luxury it once was. Grumpy passengers squeeze into uncomfortable seats in overcrowded cabins and are served stale snacks. There’s also the sneaking suspicion that you are getting nickel and dimed at every turn. In fact, in the past week three airlines—Air Canada, WestJet, and JetBlue—announced that they would raise checked-bag fees. More airlines are expected to follow.

And who knows what’s next? Airlines started charging extra for checked bags about 10 years ago. Initially, the fee was only supposed to apply to a second bag, but within months the first bag got a fee, too. And it is not just baggage fees that are going up. Airlines now charge for basic services, like the ability to choose your seat in advance or to use the overhead space for your carry-on.

Paying for something that used to be free feels wrong. But in this case, it is something to celebrate.

In the good old days of air travel most services—food, baggage, leg room, and everything else—were bundled together, so everyone paid for them as part of their airfare. But then came deregulation and the internet, which empowered customers to comparison shop. Suddenly, airfares got very competitive and it became nearly impossible to raise fares above rivals on the same route. This is a major reason why airfares have become much cheaper over time.

If it feels like you are getting less service when you fly, you are—but you are also paying less for it. Airlines, a hard business at the best of times, need to find other sources of revenue. That’s why they charge for the extras, now that most aspects of flying are unbundled.

The unbundling of airline services is generally a good thing. Cheaper prices for passengers willing to forgo certain amenities allow more people to fly more often. Studies also show that reducing the number of checked bags, by charging fees to discourage them, cuts the time it takes to get bags on and off planes. This results in fewer flight delays.

It is still possible to get the wonderful treatment airline customers experienced in the 1980s, but you need to pay 1980s prices, upgrade to premium cabins, and pay the bag fees. Is it worth it?