The airlines’ baggage

May 22, 2008 By 12 Comments

So American Airlines next month is going to start charging $15 to check your bag! Other airlines are considering it. See Checked Bag Fees: Money for Nothing.

Have the airlines considered the unintended consequences? Customers who will now choose airlines that provide normal reasonable service? More unchecked luggage clogging up the security lines, crammed into scarce cabin space, and slowing down boarding? Even more rage at LOST luggage?

I understand that fuel prices and cutthroat competition are squeezing airlines, so that the only way they can make ends meet is by cutting out the free peanuts and the like. But airlines have always had trouble making a profit. Isn’t there a business model that would allow airlines to stay in business while providing good service?

Higher prices would surely be a part of that, but the pricing system seems out of joint also, with some passengers paying many times what others pay for the same flight. Is there a solution to this?

Filed Under: Economics 12 Comments
About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • http://www.hempelstudios.com Sarah in Maryland

    How about $15 for UN-CHECKED bags. I hate when I get on with nothing but a purse and a small bag of books with no place to put them because people bring so much carry on!

  • http://www.hempelstudios.com Sarah in Maryland

    How about $15 for UN-CHECKED bags. I hate when I get on with nothing but a purse and a small bag of books with no place to put them because people bring so much carry on!

  • Carl Vehse

    Cattle have no need to check in baggage; and that’s what we are to the airlines.

  • Carl Vehse

    Cattle have no need to check in baggage; and that’s what we are to the airlines.

  • http://poststop.wordpress.com Ethan

    Hah! Getting my tickets to MN this week, it will be on American, I am an Airpass customer and will have a new baby, can you say preboard! And all 6 of us will have carryons only. Some cattle are more equal than others.

    Well maybe we will just drive, what’s a few thousand miles…

  • http://poststop.wordpress.com Ethan

    Hah! Getting my tickets to MN this week, it will be on American, I am an Airpass customer and will have a new baby, can you say preboard! And all 6 of us will have carryons only. Some cattle are more equal than others.

    Well maybe we will just drive, what’s a few thousand miles…

  • http://www.cockahoop.com/ tODD

    The solution, as always in capitalism, would be for people to punish American by not flying with them. However, American’s decision makers are clearly betting against that happening. And I think American has some evidence in its corner — if I remember correctly, they were one of the first airlines to make passengers pay for food if they wanted any. Apparently, that didn’t hurt their business.

    Of course, by moving these charges out of the ticket price and making them into theoretically optional fees, they make their ticket prices more competitive — with rising oil prices and tough market competition, they can offer a ticket that is $25 cheaper than another airline with free luggage and an in-flight meal, and not even lose any money on that discount. And I’m willing to bet that people will overwhelmingly favor a $25-cheaper ticket when shopping for fares, even if they have to pay more later on.

    The problem is that it’s up to the consumer to remember all these facts when buying tickets — the Web sites we overwhelmingly buy them from now are almost entirely centered around one datum, the price (and, to a lesser degree, the number of connections or total time spent traveling). No Web site I’ve seen will tell you that, yes, that ticket is cheaper, but they have less leg room than most carriers, you have to pay if you want food or headphones or checked luggage, and their customer service is terrible. When customers shop based solely on ticket price, then they get shenanigans like this from American.

    That’s one reason I doubt you’ll see a discount for those not checking bags. Sure, it benefits the customer most, but meanwhile, that airline will be losing customers because their tickets look more expensive.

    I do worry about what this will do for the overhead bins — competition for that space has always been tight. But now on American, it could get downright ugly. Before, it was merely an inconvenience if you couldn’t cram your luggage into a bin somewhere. You’d have to have it checked and pick it up in baggage return when you landed. Now, it’ll cost you $15. And there’ll be more people than ever trying to fit their luggage onboard. For that reason alone, I’m going to avoid American. To avoid the brawls over scarce resources.

  • http://www.cockahoop.com/ tODD

    The solution, as always in capitalism, would be for people to punish American by not flying with them. However, American’s decision makers are clearly betting against that happening. And I think American has some evidence in its corner — if I remember correctly, they were one of the first airlines to make passengers pay for food if they wanted any. Apparently, that didn’t hurt their business.

    Of course, by moving these charges out of the ticket price and making them into theoretically optional fees, they make their ticket prices more competitive — with rising oil prices and tough market competition, they can offer a ticket that is $25 cheaper than another airline with free luggage and an in-flight meal, and not even lose any money on that discount. And I’m willing to bet that people will overwhelmingly favor a $25-cheaper ticket when shopping for fares, even if they have to pay more later on.

    The problem is that it’s up to the consumer to remember all these facts when buying tickets — the Web sites we overwhelmingly buy them from now are almost entirely centered around one datum, the price (and, to a lesser degree, the number of connections or total time spent traveling). No Web site I’ve seen will tell you that, yes, that ticket is cheaper, but they have less leg room than most carriers, you have to pay if you want food or headphones or checked luggage, and their customer service is terrible. When customers shop based solely on ticket price, then they get shenanigans like this from American.

    That’s one reason I doubt you’ll see a discount for those not checking bags. Sure, it benefits the customer most, but meanwhile, that airline will be losing customers because their tickets look more expensive.

    I do worry about what this will do for the overhead bins — competition for that space has always been tight. But now on American, it could get downright ugly. Before, it was merely an inconvenience if you couldn’t cram your luggage into a bin somewhere. You’d have to have it checked and pick it up in baggage return when you landed. Now, it’ll cost you $15. And there’ll be more people than ever trying to fit their luggage onboard. For that reason alone, I’m going to avoid American. To avoid the brawls over scarce resources.

  • http://www.cockahoop.com/ tODD

    Also, Veith noted that “the pricing system seems out of joint also, with some passengers paying many times what others pay for the same flight.” Of course, as far as the airlines are concerned, this is a feature, not a bug.

    They’re maximizing profit by getting people to pay as much as they’re willing, depending on their situations. Departing and returning within the week? You’re probably on business, and you’ll probably pay a lot more for a ticket than a tourist would. The solution to this? Well, again, it would involve the customers — in this case, business customers — rejecting the airlines’ shenanigans and always picking the cheaper ticket. The problem with this is that then forces the business to pay for extra nights at the hotel, and the businessman gets grumpy because he’s away from his family on a weekend.

    And, of course, that this just encourages more of the problems that come from the cheap-tickets-at-all-costs mentality, as mentioned before.

  • http://www.cockahoop.com/ tODD

    Also, Veith noted that “the pricing system seems out of joint also, with some passengers paying many times what others pay for the same flight.” Of course, as far as the airlines are concerned, this is a feature, not a bug.

    They’re maximizing profit by getting people to pay as much as they’re willing, depending on their situations. Departing and returning within the week? You’re probably on business, and you’ll probably pay a lot more for a ticket than a tourist would. The solution to this? Well, again, it would involve the customers — in this case, business customers — rejecting the airlines’ shenanigans and always picking the cheaper ticket. The problem with this is that then forces the business to pay for extra nights at the hotel, and the businessman gets grumpy because he’s away from his family on a weekend.

    And, of course, that this just encourages more of the problems that come from the cheap-tickets-at-all-costs mentality, as mentioned before.

  • johnlnk

    The low cost airlines in Europe have been doing this for a few years now and it was only a matter of time before it came to the US. I personally would rather that they have to transfer certain costs directly to the customer than be forced to make service cuts of worse, seek out bottom-dollar maintenance contracts and generally keep the airplanes in worse shape.

    As for customer service, name one industry where it hasn’t gotten markedly worse in recent years. It seems we can’t buy anything or go anywhere without fighting against this trend. I get so tired of faulty products, poor support and bad attitudes that I’m tempted to withdraw from the economy entirely, as if that were possible!

  • johnlnk

    The low cost airlines in Europe have been doing this for a few years now and it was only a matter of time before it came to the US. I personally would rather that they have to transfer certain costs directly to the customer than be forced to make service cuts of worse, seek out bottom-dollar maintenance contracts and generally keep the airplanes in worse shape.

    As for customer service, name one industry where it hasn’t gotten markedly worse in recent years. It seems we can’t buy anything or go anywhere without fighting against this trend. I get so tired of faulty products, poor support and bad attitudes that I’m tempted to withdraw from the economy entirely, as if that were possible!