MW Why airlines were already raising baggage fees even before travel demand started dropping

By Charles Passy

Airline passengers around the globe spend $33 billion on baggage fees - and now Southwest plans to start charging for the first time

It's getting more and more expensive to check a bag when you fly.

Over the past several months, some major carriers - including American Airlines $(AAL)$, Alaska Airlines $(ALK)$ and JetBlue $(JBLU)$ - have raised their fees by $5 to $10 per bag, with charges now going as high as $45, according to reports. And Southwest Airlines $(LUV)$, one of the carriers that had long bucked the industry trend and didn't levy luggage fees, recently announced it would begin charging for baggage starting on May 28, although the exact amounts have not been revealed.

All this comes at a time when airlines are looking at what could be a rough 2025, based on the fact consumers may not want to travel because of economic concerns. Earlier this week, American Airlines withdrew its full-year guidance because of a travel decline in the first quarter of 2025. And Southwest said it was girding itself for lower demand, as evidenced by what it had seen in the past two months.

"Of course, the big topic on everyone's minds right now is the macroeconomic environment," chief executive Bob Jordan said during an earnings call this past week.

But travel-industry experts said the changes in baggage-fee policies and charges were probably unrelated to concerns about declines in booking. That's because those changes were likely being discussed well before airlines started to see those declines as a possibility.

"I think it's coincidental," said John DiScala, a travel influencer who goes by the moniker Johnny Jet, of the timing.

At the same time, experts said baggage revenue is a much-valued money-maker for airlines - and especially for lower-cost carriers, who depend on every traveler dollar they can get.

Indeed, since airlines started charging luggage fees more than 15 years ago, the annual amounts they've collected have skyrocketed, according to Bureau of Transportation statistics. Among the major U.S. carriers, the total has gone from $1.1 billion in 2008 to slightly more than $7 billion in 2023, the most recent year for which complete data is available.

And if you look at carriers globally, the total collected for baggage fees is $33 billion, according to one report.

Legacy carriers certainly like the extra cash they collect from travelers who check their bags, but it may account for only 2% to 4% of their overall revenue, according to one analysis. But with those low-cost carriers, it can top 20%.

Southwest's Jordan didn't directly address during the earnings call how baggage fees might offset any potential declines in travel, but he did say the "transformative initiatives we have rolling out the rest of this year and into 2026...should provide a significant benefit."

Still, some experts caution that Southwest's strategy could backfire, since travelers have long embraced the carrier in part because it didn't charge baggage fees.

"They're taking a gamble...People may look elsewhere," said Katy Nastro, spokesperson for Going.com, a travel-booking site.

Meanwhile, travelers do have ways of avoiding paying for those pesky baggage fees. It's fairly common to fly fee-free if you have elite status with an airline or have a branded credit card through it, even though those cards themselves often carry an annual fee.

Aktarer Zaman, chief executive of Skiplagged, a travel site, said another way to approach the problem is to simply be a smart shopper and look for cheaper fares. In effect, the savings on the ticket might go far beyond the cost of the baggage fees from carrier to carrier.

"Focus on the lower base [fare] and everything else should be okay," he said.

-Charles Passy

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April 25, 2025 18:42 ET (22:42 GMT)

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