3 days ago
$7.27 billion and counting: How checked baggage fees became a goldmine for airlines
Airline companies are making huge profits from baggage fees. Earlier, airlines provided free baggage service. Now, passengers pay extra for checked baggage. This change started in 2008 and continues today. Passengers now prefer smaller bags to avoid fees. Airlines earned billions from these charges. The trend of charging for bags is likely to continue.
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What began as a temporary solution to rising fuel costs has evolved into a permanent, multibillion-dollar profit engine for the airline industry. In 2024 alone, U.S. airlines collected a record-breaking $7.27 billion in checked baggage fees—surpassing pre-pandemic levels and cementing these charges as a key revenue included in the ticket price, checked baggage is now a major revenue stream. Passengers are increasingly packing light or opting for smaller carry-on bags to avoid these mounting costs. The industry shift has fundamentally altered how travelers plan, pack, and such as Air Canada and Southwest Airlines—the latter long known for its "bags fly free" policy—have recently reversed course. Southwest now charges $35 for a first checked bag, ending more than 50 years of free baggage backlash is growing. Passengers have labeled these charges 'junk fees,' as nearly every element of the flying experience—baggage, seat selection, even carry-on storage—is now monetized. Major U.S. carriers American, Delta, and United each earned over $1 billion in baggage fees in 2023, according to travel website Upgraded fee frenzy began in 2008, when American Airlines became the first U.S. airline to charge $15 for the first checked bag. Today, that fee is more than double—and no longer a novelty. According to the Bureau of Transportation Statistics, the industry's total bag fee revenue rose from $5.76 billion in 2019 to $7 billion in 2023, and now $7.27 billion in consultant Jay Sorensen of Ideaworks told BBC that legacy carriers followed the lead of budget airlines, who redefined pricing by unbundling services. 'There was a time when checked bags, seat selection, and meals were standard,' he says. 'But traditional airlines felt they had to adapt or lose out to low-cost competition.'The impact on travelers is clear: what was once included now requires careful financial planning. Rising fees are driving a boom in compact luggage sales, as travelers seek to avoid checked bag charges altogether.
