Allison Sider

speaker

137 appearances 2 recordings 1 series first heard Dec 2017 last heard Apr 2024

Allison Sider’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Traveling Is Getting More Expensive. So Are Your Bags. · 25 Apr 2024 podcast

And they say their customers like that because you can get a pretty cheap ticket and you don't pay for things that you don't want.

And Spirit put in its check bag fee in 2007.

And around that time, there was a big spike in fuel prices.

And they kind of all gradually turned to bag fees as a way to try and recoup that.

And it's become a really lucrative part of the business for most airlines, with the exception of Southwest that still gives you two checked bags for free.

Right now they're saying, look, we haven't touched our bag fees since, in most cases, 2018.

And the price of everything has gone up.

So airlines are paying more for labor.

They're paying more for fuel.

And they just need to raise these prices to sort of cover their costs.

There are other reasons.

It's a very competitive industry.

And so if an airline has a cheap fare, a bunch of other airlines want to match it.

It can be kind of hard for them to raise fares.

And a lot of analysts say they don't really have the pricing power right now to raise fares to cover their higher costs.

So we're seeing that translate into higher fees instead.

How much are airlines making from bag fees?

I mean, in 2022, which is the last full year of data we have, bag fees brought in almost $7 billion.

Last year, in the first three quarters of the year, it was about $5.5 billion.

So it brings in a lot of money for them.

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