Have $15… Will Travel

sb10069230w-001I found this interesting article in the Wall Street Journal (via Yahoo!), which talks about the actual cost to airlines for carrying your luggage to your final destination.  While the industry norm just a few months ago was to allow for two checked bags per passenger, most major airlines now charge $15 for the first piece of checked luggage, and possibly even more for the second and third (major kudos to Southwest Airlines, which is still letting you check not only your bag full of dirty-undies, but your second bag of cheap trinkets and tax-free tequila for free!).

But just how much of these new fees actually cover the expense of the luggage itself?

I know a bit about airplanes, enough to know that for every additional pound that you need to carry requires a proportionate amount of fuel – and that extra fuel costs extra money: 

One rough formula sometimes used in the airline business to approximate fuel costs is that it requires 3% to 5% of the weight of an object in fuel to fly it one hour. That means at current fuel prices, it would cost about $1 to $2 to fly a 40-pound bag on an average three-hour trip.

But one thing people often don’t consider is the labor involved in getting your bags on and off the plane:

US Airways Chief Executive Douglas Parker said earlier this year that his airline spends $250 million on labor just to handle baggage. That was about 11% of the airline’s payroll last year, and works out to something close to $9 per bag…

Add it all up, and the best guess is around $15 per bag in airline costs. Whether coincidence or careful accounting, airlines settled on $15 as the fee to charge for the first checked bag.

Additional fees suck.  But in the end, it’s up to we the consumers to either live with them, travel less, or pack lighter.  If the industry sees a drop in passengers due to the increased charges, they may look for other means for profit, but that seems unlikely:

Customers were paying the fee at other airlines without a backlash. Delta said it wasn’t getting any benefit from not charging the fee. So why not charge it?

And if you think this fee is passed to those that can afford first-class, think again:

At most airlines, elite-level frequent fliers, first-class ticket-holders and international passengers are exempt from many of the fees.

Another plan by the man to keep us middle class down!  Where’s Our Lord Obama’s spreading of the wealth now?


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Filed under Business, Middle class, Spending money

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