As you head off on your Thanksgiving travels this week and prepare to pay airline baggage fees, you may wonder what it actually costs the airline to fly your 40-pound suitcase.
Based on our own estimate derived from consultations with industry executives and other sources, the cost to carry checked luggage comes to roughly $15 a bag. That, it turns out, is what most big airlines—including AMR [1] Corp.'s American Airlines and Continental Airlines [2] Inc.—are charging fliers to check their first bag. But those who check multiple bags, ski equipment or oversized or overweight luggage are paying much, much more—allowing airlines to make a tidy profit. In those instances, baggage fees may yield more profit for the airline than what the carrier is making on the basic passenger ticket.
Airlines don't break out the expense of transporting passenger baggage, and they are tight-lipped about baggage because they know many customers are angry about the new fees. Airlines aren't always so opaque when it comes to their cost data—American once famously counted the savings from removing olives from salads. But, several airlines contacted declined to discuss breakdowns of baggage costs; some were downright defensive.
Via Kilroy's Links [3], “What It Costs to Fly Your Luggage - WSJ.com [4]”
Back before deregulation, the airlines could really only compete on service, not price. And the service was fantastic back then. Comfy chairs, decent food, lovely beverages and you weren't packed like cattle on a train. Since then however, airlines are fiercely competing on price and now the chairs are smaller, the food is a joke, you might get a complementary beverage and forget the snacks [5].
And now this.
What next? Charge per pound of passenger [6]?
[1] http://sec.online.wsj.com/public/quotes/main.html?type=djn&symbol
[2] http://sec.online.wsj.com/public/quotes/main.html?type=djn&symbol
[3] http://kilroyslinks.blogspot.com/2008/12/wall-street-journal-what-it-
[4] http://sec.online.wsj.com/article/SB122757025502954613.html
[5] http://www.google.com/search?q=schools+ban+peanuts
[6] http://www.bloomberg.com/apps/news?pid=20601109&sid=aJmRIapedEs0&refer=home