Charging for Carry-on Baggage Would Be a Very Bad Idea

Reader Lisa points to the LA Times Travel Blog which asks whether airlines should charge for carry-on bags.

George Hoffer, a professor of economics at Virginia Commonwealth University in Richmond, thinks the people in a hurry — that is, the ones who want to get off the plane fast and shoot out the door — would be willing to cough up some cash to carry on a bag. Time, after all, is money.
“What you’re doing is catering to the person whose time is of more value,” Hoffer said.

The question is, what service are you asking people to pay for that they were already receiving at a lower price than they’re willing to absorb? Is it having their bags moved from city A to city B, or is it ‘getting off the plane fast’ or is it both?

Airlines do receive greater payments for getting off the plane first, most carriers have a bundled product they call first or business class. And the front rows of coach are generally dedicated to elite travelers a.k.a. repeat buyers.

And airlines already charge those in a hurry — business travelers buying last-minute or refundable/changeable tickets – more. They’re also far more profitable, so nickel and diming them may not make sense, especially if an airline’s competitors don’t adopt the same policy, and especially if corporations don’t adjust quickly to become willing to reimburse the expense. Such travelers will book away from the airline.

But the idea really seems to turn incentives on their head. People who don’t check bags are less costly to process, that’s what you want to incentivize not penalize. Charge for carryons and you’ll get more checked bags, which will increase costs to the airline for handling those bags.

Besides, it’s also much more difficult to enforce. Customers could declare their carry-ons at the check-in counter, but customers with only carry-ons are generally encouraged not to check-in at the counter but on-line or at a kiosk (customers with bags to check are as well but they still have to interact with a person — another way customers without checked bags are cheaper to process, and charging for carryons will change that dynamic). Sure, many international carriers pay close attention to the weight and dimensions of carry-ons, so it’s possible, but enforcement will happen at the gate which is either a significant added staffing burden there or a likely cause of departure delays which are also costly to the airline.

So while it’s creative, I also think it’s counterproductive for an airline to go down that route.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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