Checked Bag Fees Are Insane! Why? The Answer Will Surprise You!
Airlines are raking in billions from sky-high bag fees, but there’s a simple way to avoid them! Learn the secrets behind checked bag fees. 😱💸✈️ #TravelTips #PackLight #AirlineBagFees
Minneapolis-St. Paul, Minnesota – Have you noticed that checking a bag for your flight is getting more and more expensive? It’s not just your imagination! Five of the six biggest airlines in the U.S. have hiked their checked bag fees since the start of 2024. What’s going on?
🛄 The Rising Cost of Checking a Bag
Let’s take a look at American Airlines as an example. In 2023, it would set you back $30 to check a standard bag. Fast forward to March 2024, and that same privilege now costs a whopping $40 at a U.S. airport. That’s a jaw-dropping 33% increase in just one year!
So why are airlines nickel-and-diming their customers with these pesky baggage fees instead of just bundling everything together into one simple price? As it turns out, there are quite a few reasons – but one of the biggest ones is hiding in plain sight in the U.S. tax code.
💸 The Sneaky Tax Loophole Airlines Love
You see, airlines have to pay the federal government 7.5% of the ticket price when flying people within the U.S., along with some other fees. The airlines aren’t too happy about this, and their trade group says it jacks up the cost of a typical plane ticket by around 20%.
But here’s where things get interesting. The U.S. Code of Federal Regulations says that baggage is exempt from that 7.5% transportation tax as long as the charge for bags is separate from the ticket price and the exact amount is clearly shown.
What does that mean in plain English? Well, let’s say an airline charges you a combined $300 for a round-trip flight within the U.S., and that includes the cost of checking a bag. In that case, the airline would owe $22.50 in tax to the government.
But if the airline charges you $220 for the flight and then tacks on a separate $40 fee each way for your bag, your total cost is still $300 – but the airline only owes Uncle Sam $16.50 in taxes. By splitting out the baggage charges, the airline saves itself $6.
A Baggage Bonanza for Airlines
Now, $6 might not sound like much, but when you consider that passengers took more than 800 million trips on major airlines last year, it really adds up! Even if only some of those people checked bags, we’re talking about huge savings for the airline industry.
In fact, the government has been keeping tabs on how much money airlines make from bag fees for a long time. Back in 2002, airlines charged passengers a total of $180 million to check bags, which worked out to a measly 33 cents per passenger.
Oh, how times have changed! Last year, airlines raked in over 40 times more money in bag fees than they did way back in 2002. Once all the data is tallied up for 2023, experts think the total bag fees will easily top $7 billion. That works out to about $9 per passenger for domestic flights.
By charging separately for bags, airlines were able to avoid paying around half a billion dollars in taxes in 2023 alone. And over the past two decades, flyers have shelled out a mind-boggling $70 billion in bag fees, saving the airlines about $5 billion in taxes. It’s pretty clear that dodging taxes is a big reason why airlines love to charge extra for bags.
🧳 Do Bag Fees Lead to Better Baggage Handling?
You might be wondering if paying more to check a bag means the airlines will take better care of your stuff. After all, when you’re shelling out extra cash, you expect a little more TLC, right?
To find out, I did some digging into government data on lost luggage. For years, the Bureau of Transportation Statistics tracked the number of mishandled-baggage reports per thousand passengers.
Back in 2007, about seven out of every thousand passengers reported lost or damaged luggage. That means you could expect your suitcase to take a different vacation than you about once every 140 flights. Yikes!
The good news is, by 2018, that number had dropped to just one wayward bag for every 350 flights. Starting in 2019, the government changed the way it tracks mishandled bags and began looking at the number of bags that get lost or damaged per thousand bags checked.
The latest data shows that less than 1% of checked bags go missing or get mangled – about six bags per thousand. Unfortunately, the numbers haven’t gotten any better since 2019. So while paying bag fees might help fatten the airlines’ bottom line, it doesn’t seem to be leading to big improvements in how they handle our precious cargo.
The Simplest Way to Avoid Bag Fees
So what’s a savvy traveler to do? Complaining to your elected officials probably won’t get you very far. A couple of senators tried to ban bag fees way back in 2010, but their bill never got off the ground.
The easiest way to avoid those pesky bag fees is to just travel light and skip checking a bag altogether. Sure, it might be tough to cram all your stuff into a carry-on, but it could save you a bundle as bag fees continue to soar.
🗣 Do you check your bags… or pack light? We’d LOVE to hear from you in the comments section below. ⬇️
