Traveling Is Getting More Expensive. So Are Your Bags.
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Before we get into today's episode, Your Money Briefing is exploring what you need to know to become a homeowner and sustain your home. You can get early access to our series, Buying a Home and Keeping It, on WSJ Special Access, available only for WSJ subscribers. Now, onto the show. Here's Your Money Briefing for Thursday, April 25th. I'm Arianna Espuru for The Wall Street Journal, filling in for J.R. Whelan. Booking a summer trip? It might be time to pay extra attention to those bag fees. Airlines are raising the cost to check a bag.
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.
WSJ reporter Allison Sider joins me to discuss after the break.
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It seems like the age of booking your flights and worrying about the bag fees later might be over. WSJ reporter Alison Sider looked into this and joins me. Alison, what's the average cost of checking a bag now?
Well, a first bag now on most airlines is going to run you at least $35. On some airlines, if you forget and you don't book in advance, you're going to be on the hook for $40 for one bag. And if you want a second bag, you're looking at at least another $45. And how much has that price changed over the last few years? The last time we really saw a big wholesale, industry-wide increase in bag fees was in 2018. And that's when we saw a lot of them go up from $25 to $30. And they were pretty steady, largely because of the pandemic the last couple of years. They've really come a long way. Bag fees weren't widespread until around 2008. Before that, it's kind of hard to believe, but you got often two checked bags for free, including your ticket.
They started off like fairly nominal and over the years they've climbed from 15 for a first bag to 20, 25. And now here we are at 35 at least.
The idea of two checked bags for free seems so foreign now, but I remember airfares used to include the guarantee of at least one checked bag. What happened?
Budget airlines like Allegiant and Spirit were pretty early to the checked bag fee. They have a different business model. They keep their base fares really low and they have fees for everything else. 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.
You kind of touched on it a little there, but what are some of the reasons why airlines are saying they have to be raising these fees?
Right now they're saying, look, we haven't touched our bag fees since, in most cases, 2018.
How are rising baggage fees becoming a new travel cost to budget for?
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.
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