How airline fees have turned checked baggage into billions

The airline industry has seen significant changes over the last few decades. One of the most notable shifts has been the introduction of baggage fees. What used to be a free service has evolved into a complex revenue generator, transforming baggage handling into a billion-dollar industry. It was in 2006 when UK low-cost carrier FlyBe became what is believed to be the world's first airline to start charging passengers to check in bags. It charged £2 for a pre-booked item of luggage, and £4 if the customer hadn't paid in advance.

As travelers seek more affordable options, airlines have tapped into this trend by charging for services that were once part of the ticket price. In this article, we will look into the rise of baggage fees, their impact on both consumers and airlines, and the broader implications for the travel sector.

The Rise of Baggage Fees

In the early 2000s, airlines began introducing baggage fees as a strategy to counter rising fuel costs and improve profit margins. While some airlines already charged for checked luggage, this practice surged after the financial crisis of 2008. According to industry reports, over 80% of U.S. airlines implemented some form of baggage fee by 2010.

This change in pricing meant that passengers no longer paid a single price for their travel. Instead, they faced additional costs based on their choices and needs. Consequently, travelers had to navigate these extra charges, comparing airlines not just on ticket prices but also factoring in potential baggage costs.

Revenue Generation

Baggage fees have become a crucial revenue stream for airlines. In 2022, U.S. airlines made around $4.5 billion from baggage fees alone. This significant amount plays a vital role in boosting overall profits, especially when demand fluctuates or operational costs rise.

By charging for checked baggage, airlines can offer lower base fares, attracting budget-conscious travelers. Many passengers now prioritise savings over comfort, often selecting the cheapest flights available, regardless of extra baggage costs.

The Impact on Travelers

For many, these fees have added complexity to air travel. Some passengers are okay with just a carry-on, while others struggle with unexpected expenses for checked bags. For example, a traveler planning a week-long holiday to a short haul destination might face a charge of $30 to $100 for checking one bag on Jetstar, whereas an extra suitcase above your 'special' fare 20Kgs allowance on the Auckland to Dubai route with Emirates will cost you $40usd per kilo which for a 23kgs case equates today to $1522nzd.

This fee structure pushes travelers to "pack smart" to avoid added costs. As a result, fights for overhead bin space during boarding can lead to overcrowding and delays. Studies indicate that nearly 30% of travelers report stress related to baggage management on flights.

Continuing Trends and Innovations

Airlines are continuously seeking new ways to profit from their services, including tiered baggage options. For instance, some airlines are testing subscription models that offer frequent flyers a flat rate for checked bags over multiple trips. This strategy not only rewards loyal customers but also softens the negative view of baggage fees.

Technology is also making strides in baggage management. Some airlines are now using advanced tracking systems that provide near real-time updates on luggage locations. This innovation not only enhances customer service but can also reduce costs associated with misplaced luggage, which affects about 5% of travelers annually.

Environmental Considerations

As the aviation industry faces increasing scrutiny about its environmental impact, baggage fees may evolve further. Airlines are now under pressure to adopt sustainable practices. Some are strategising ways to encourage lighter packing or less checked luggage by offering lower fees for those who comply. This not only addresses environmental concerns but also helps manage operational efficiencies.

Final Thoughts on Airline Baggage Fees

The shift toward baggage fees has reshaped the travel landscape and changed how consumers behave. Today's travelers are more informed and mindful of their choices and how they affect travel.

Airline	Carry‑on	1st Checked Bag	2nd Checked Bag	Oversize / Overweight Fees
Air New Zealand	1 carry‑on + 1 personal item — free	Included in all fares except “Seat” only: NZD $35–$45	$60–$90 depending on route	$150 NZD (23–32kg), $200 NZD (32–50kg)
Qantas (Australia)	1 carry‑on + 1 personal item — free	Included in most fares (except some Red e-Deals)	AU$30–AU$70 depending on route	AU$90–AU$300 (varies by route & size)
Jetstar (Australia/NZ)	Only 7kg carry‑on included	From AU$25–AU$40 (varies by route)	AU$35–AU$55	AU$60–AU$150 (per bag >23kg or >32kg)
Virgin Australia	1 carry‑on + 1 personal item — free	Included in most Saver/Value fares	AU$35–AU$60	AU$70–AU$150 (23–32kg), not allowed >32kg
Regional Express (REX)	1 carry‑on — free (7kg)	Free up to 23kg on Flex fares	$25–$50 for excess bags	AU$5/kg above 23kg (max 32kg)
American Airlines	1 carry‑on + 1 personal item — free	$35 online / $40 at airport	$45	$150 (>50lb or >62in)
Delta Airlines	1 carry‑on + 1 personal item — free	$35	$45	$100–$200 (>50lb or 62–80in)
United Airlines	1 carry‑on + 1 personal item — free (except Basic Economy)	$35–$40	$45–$50	$150+ depending on size/weight
Alaska Airlines	1 carry‑on + 1 personal item — free	$30–$35	$40–$45	$100–$150
Hawaiian Airlines	1 carry‑on + 1 personal item — free	$30 (domestic) / $15 (inter-island)	$40	$150 (>62in), $50–$200 (>50lb)
JetBlue	1 carry‑on + 1 personal item — free (not Basic Blue)	$35–$40	$50–$60	$150+ depending on route
Frontier Airlines	Personal item only; carry-on = $34–$60	$55–$100	$73–$94	Varies — up to $150+
Spirit Airlines	Personal item only	$30–$60	$70–$90+	Up to $150+ depending on size/weight
Southwest Airlines	1 carry‑on + 1 personal item — free	$35 (as of May 28, 2025)	$45	$75 flat for overweight/oversize

While airlines have capitalised on baggage fees, the future may continue to see changes as they balance customer expectations, operating expenses, and environmental responsibilities. Understanding these fees can lead to a smoother travel experience. By being aware of what costs to anticipate, travelers can make savvy decisions better suited to their needs.

Using a travel agent is a smart choice because they provide a clear, all-inclusive view of your travel costs—especially when it comes to extras like baggage fees, which are often not included in online fares. Agents can bundle your flights, baggage, accommodation, transfers, and insurance into one upfront price, so you’re not hit with unexpected charges at the airport. They’re also experts in airline policies and fine print, making sure you avoid hidden costs and travel confidently knowing everything is covered. This not only saves you time and stress but often results in better overall value and peace of mind.