Bags not - airlines charge $42.1 billion for carrying passengers' luggage

Airlines are charging more for extras. Photo / 123rf

Airlines around the world charge an estimated US$28.1 billion ($42.1b) for carrying bags during the past year, up a whopping 110 per cent on four years earlier.

The global study of 175 airlines found baggage fee revenue as a proportion of total income was 3.2 per cent, up from 1.8 per cent in 2014.

Total ancillary revenue estimated earlier this year stands at $92.9b.

The study was done by IdeaWorksCompany, an airline ancillary revenue consultancy and CarTrawler, a transport technology platform.

Baggage revenue comes from three primary sources - checked baggage in the aircraft belly, added fees for heavy and extra-large bags, and for some airlines, the price charged for larger carry-on bags.

The sharp increase in growth of budget airlines with low fares but charges for nearly all extras has fuelled the steep climb in ancillary revenue. Other airlines such as Air New Zealand operate a hybrid model - full service on some tickets and payment for extras on others.

The airline does not break out what it makes from ancillary revenue in its accounts.
Aileen McCormack, CarTrawler's chief commercial officer, said total ancillary revenue had grown by 128 per cent between 2014 and 2018.

"It is no surprise that baggage fee revenue has grown by a similarly huge margin, in terms of both monetary value and as a percentage of overall global airline revenue," she said.

"This overall trend reflects traditional airlines' strategy of embracing a la carte revenue alongside low-cost providers."

There are ways of avoiding the charges. In the United States and Canada it is typical for passengers to use an airline co-branded credit card to avoid being charged for the first bag checked. Frequent flyer members can also avoid extra bag charges.

Baggage fees in the US spiked last year as carriers faced higher fuel charges. They are typically US$30 for a first checked bag.