Why the airlines want to charge you for carry-on bags

airline-profitability.jpg Well, just look at this chart - the airline industry hasn't made much money over the last 40 or so years. There are a few successful stretches (the late 90s were good years), but otherwise it's one lousy business. Labor and energy costs are killers - as is the pricing structure. Going back to the 1950s and 60s, you'll find that fares are not altogether different than they are today. Problem is that they should be way higher, given inflation. So the airlines look for new revenue sources, such as charging for checked baggage. And now they're talking about a carry-on charge. From the NYT:

Spirit Airlines initiated a major new approach to carry-on bags almost two years ago when it began charging passengers $45 to stash carry-ons in overhead bins. Spirit plans to raise that fee at the gate this fall to $100 per bag. But Spirit's success in discouraging carry-ons has evidently resonated with the bigger airlines, at least on the subject of passengers who now gate-check oversize bags free. "Everybody who flies knows that it's just a mess boarding at the gate," as passengers wait while carry-ons are stored on the plane, said Jay Sorensen, the president of IdeaWorks, which specializes in airline fee revenue strategies. Because of fees for checked bags, "airlines have conditioned many travelers to just take a bag to the gate and let the gate agent or the flight attendant on board the airplane sort it out," he said, adding, "It's a horrible system."


Some airlines are already partly addressing the overhead bin squeeze by adding some space. American, for example, had bigger overhead bins installed as part of improved interior designs on the more than 130 new Boeing 737-800 airplanes that it began receiving last month to replace its old MD-80 planes. United is carving out some extra space by redesigning the doors on bins on the 152 Airbus planes in its fleet, [said David Messing, a United spokesman].But anyone who gets on a plane, or works on one, knows that bags the size of Winnebagos and the people who break rules by hauling them on board are a continuing nuisance. Assuming those bags can't fit into bin space, they are now routinely gate-checked free (along with any spillover of regulation-size bags that can't fit in full bins).

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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