Airlines raked in an estimated US$28.1 billion in revenue from baggage fees in 2018 – up 110 per cent since 2014.
The figure is an estimate from IdeaWorksCompany and CarTrawler, which recently calculated that global ancillary revenue for airlines reached $92.9 billion in 2018, up from $82.2 billion in 2017.
The CarTrawler Global Estimate of Baggage Fee Revenue report shows money made from luggage charges accounted for 3.2 per cent of global airline revenue. This contrasts with 2014 figures, where such fees made up 1.8 per cent of revenue.
Each year IdeaWorksCompany and CarTrawler analyse the ancillary revenue disclosures for airlines around the world. Baggage activity for each category of carrier is added to this to calculate a global estimate. The firm’s say luggage fees make up a significant component of ancillary revenue and the analysis consists of three primary sources: checked baggage in the aircraft belly, added fees for heavy and extra-large suitcases and, for some airlines, the price charged for larger carry-on items.
Interestingly, the breakdown of the top 20 airlines shows that carriers based in Europe and North America are the most likely to charge a fee for some bags, whether it’s extra or oversize luggage or bags added to basic economy fares, which typically don’t include checked baggage. On the contrary, Asian and Middle Eastern airlines tend to include baggage in all fares.
Aileen McCormack, CCO of CarTrawler, commented: “The value of airlines’ a la carte revenue, or optional extras that customers can add to their basic airline fares, has risen dramatically in recent years, growing by 128 per cent between 2014 and 2018. So 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.
“This overall trend reflects traditional airlines’ strategy of embracing a la carte revenue alongside low-cost providers, offering customers the best-value solutions in a transformed marketplace.”
View the full analysis here