Leisure travel isn’t just vacation, it’s also “visiting friends and relatives” or ‘VFR’ for short. And those passengers tend to check a lot of luggage. What’s more, the mix of passengers traveling has changed. Business travelers don’t tend to check nearly as much luggage. So the same number of passengers as before on a plane comes with more luggage now than it used to.
American Airlines has adjusted some baggage fees in the Mexico, Caribbean, and Latin America market, perhaps most notably increasing third checked bag fees to $200. In the process I even learned something new, that the Cuban government requires airlines to offer two checked bags free on departures from the country.
Some things to keep in mind when you see higher baggage fees now,
- There’s limited baggage space on board an aircraft. Higher fees ration that space. Faced with more expensive baggage fees, people will consolidate items or bring less with them.
- Carrying more luggage burns fuel. It’s expensive to transport bags, not just passengers.
- Where fares are low, ancillary fees help make up for these losses. Even though leisure fares are rising as travel demand returns, business demand remains depressed so average fares lag overall.
Supposedly most people are simply concerned with the cheapest airfares so if someone is worried about every single dollar, I wonder how they will react to a $65 or $200 bag fee?
And some people, despite traveling often, never learn and do carry way too much luggage. My GF and I were getting off a train in Rothenburg, Germany after talking with an older couple on the train. It was winter, light snow and the couple had been there numerous times before. And yet the guy was hauling a crap load of luggage. We just shook our heads.
On a somewhat related note, AA now pitches a buy-up to “Main Cabin Plus” during the purchase flow when trying to book an economy ticket. It includes an extra checked bag (so 2 in total on most long-haul international tickets) and access to Priority/MCE seating. It sounds like a “re-bundling” of amenities & services that used to be included in a typical economy ticket 20 years ago. I’m surprised I haven’t seen any reporting on it.
The thing that bothers me about AA is that unlike DL and UA, they charge for a checked bag to international destinations in places like Central America, even when one has their credit card. I have multiple AA credit cards, including the executive card, and I was disappointed to learn that the card does not provide benefits for international routes.
I weigh 350 pounds and only carry a small duffel. I love bag fees, they help keep fares low.
The import of goods into these markets by U.S. based or U.S.-visiting individuals has always been commonplace, and vast quantities of checked luggage were always the norm for these markets (see MIA check-in desks). I’m curious what specifically about the customer / price dynamic has changed that drove this updated pricing structure.
Interesting point on Cuba. I always thought US airlines didn’t collect bag fees on departing flights because they would have to charge in CUCs which can’t be converted to USD outside of Cuba. I noticed the tags say “fee waived.”
I am sure there is some interesting math going down on the finance/revenue teams looking at some of these trade offs. On one hand you have the fact business travel is down, but if that is being replaced by leisure travel that is less loyal (meaning no free bags) and more likely to check a bag to start, how much does that offset lower fares? You also have air cargo in hot demand, how much revenue are you foregoing by carrying pax bags, at a steep discount to what they would be if they were just FedEx’d, vs accepting more air cargo?
It used to be that AA was a preferred choice however how can you compete with Southwest when they offer two check bags up to 50 pound each. The prices are just as competitive as AA, UA and Spirit who by the way Nicole and dimes you to death. I hate Southwest and always will because of the no assigned seats at purchase but until AA and others get it I will be stuck flying SW for the time being. I always look at the overall cost when doing my market research before committing. It’s stupid not to.