You should pad your budget for your next vacation: Your air travel is likely to be a bit more expensive.
Delta (DAL) said yesterday it has raised its baggage fees on domestic flights from $25 to $30 for the first bag and from $35 to $40 for the second. It’s following in the footsteps of JetBlue (JBLU), United Airlines (UAL), Air Canada and West Jet, which all raised their baggage fees by $5 in the past month.
American Airlines (AAL) has not yet announced any such baggage fee increases, but industry observers expect it’s just a matter of time. Southwest Airlines (LUV) remains the only major U.S. Carrier with no fees for the first two bags.
Baggage fees are a lucrative business for airlines. The Bureau of Transportation Statistics reports domestic airlines collected $2.4 billion in baggage fees in the first half of 2018, up about 7% from the same period last year. They collected a total of $4.6 billion in bag fees in 2017.
And passengers have also adapted to fees for seat selection, snacks, premium drinks, blankets, and Wi-Fi. The U.S. Airline industry collected a total of $57 billion in add-on fees in 2017, leading CNBC to ask: Is there anything left to charge for? The “third rail” might be charging for a carry-on.
Airlines around the world are testing fee increases to help cope with rising fuel prices — up 30% as compared to the first half of last year, as the industry has had its third year of declining profits. American Airlines was the first U.S. Airline to implement checked baggage fees in 2008 at the height of the recession. It at first invoked outrage from passengers, but quickly became standard across the industry.
Congress is considering asking the Department of Transportation to assess whether airline baggage and ticket change fees are “reasonable and proportional,” Reuters reports. The department spoke out in May opposing provisions in a Senate Commerce Committee bill that would prohibit unreasonable airline fees, saying it would be a return to the era before airline deregulation in 1978. Congress faces a Sept. 30 deadline to reauthorize the Federal Aviation Administration.
