JetBlue Increase the Price of First Checked Bag to $30, Will Other Airlines Match?

Over the last year JetBlue has made several moves to squeeze more revenue from customers. The airline has been eliminating its product advantages over competitors, and diminishing its customer-friendly approach. They still offer more legroom and their inflight internet generally works, but the legroom advantage is less than it used to be and the airline no longer offers a free checked bag to everyone.

Now JetBlue has made a move that its domestic rivals hadn’t yet — increasing the cost of a first checked bag to $30. And what everyone wants to know is, will other airlines match?


Last year a man checked a can of beer as luggage on a Qantas flight.

JetBlue isn’t generally an industry trendsetter, though undoubtedly other airlines will be watching what happens.

This move puts JetBlue at a $5 fare disadvantage against their competitors as customers increasingly have visibility into total trip costs and will see when a higher checked bag fee makes JetBlue the more expensive travel choice.

It’s the future of travel search, helping passengers see all-in pricing, that caused American Airlines to announce that Basic Economy would no longer prevent customers from bringing a carry on bag onboard. The airline saw itself losing business from people comparing prices with a checked bag and finding that Delta was cheaper.

Now – for customers checking bags – JetBlue will need to offer airfares that are $5 lower than competitors to offer the same total trip cost.

Of course lowering fares and increasing fees puts more money out of reach of the federal government. The 7% excise tax on domestic airfares doesn’t apply to these fees, so if nothing else JetBlue should see a tax savings.

Ultimately checked bag fees aren’t free money, except for reducing the carrier’s tax bill. Ticket prices have fallen as checked bag fees have been introduced. Some customers pay less (elites, those without checked bags) while others pay not as much less (because they’re checking a bag).

Checked bag fees give up speed-to-boarding as customers try to bring as much on the plane as possible, which means less efficient use of aircraft and across an entire fleet the need for more planes. Gate checked bags add time to the boarding process as well.

These checked baggage fees fall largely on the most price sensitive customers. Leisure travelers check bags far more than business travelers, are coming out of their own pocket, and families on the whole will be more concerned with total trip pricing.


Blog reader ‎Hemal G checked deoderant onto an American Airlines Charlotte – Newark flight because he wanted to use his free checked baggage allowance.

Some of the checked bag fees represent revenue at the margin the airline wouldn’t have earned if they were still bundling bag fees in with fares, but certainly not most. The point is this isn’t all new revenue to the airlines. Indeed Southwest Airlines even thinks they make more money not charging checked baggage fees.

I don’t see airlines matching because JetBlue has done this. If Delta moves to a $30 first checked bag fee, United and American may assume it’s a smart move because Delta executives must know what they’re doing.

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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Comments

  1. Gary, do you have thoughts you would share for either eliminating the excise tax or equalizing it across these fees?

  2. @Nick I’ve written in the past that it doesn’t seem to make sense to tax base fare but not fees. I don’t find the case for the (domestic only) excise tax, or the current rate of that tax, but if it’s going to exist it doesn’t seem to me that the tax code ought to incentivize airlines to add more fees.

  3. As someone who both has elite status and almost never checks baggage I would like to see a transition in the direction of minimal fares and bag fees in the $2-$300 range each way for carry-on’s and maybe $10-$15 less for checked. They should also carve out the back half of the plane for 27” pitch seats and impose maybe $50 for the rest of the seats with say 33″ pitch. People with emotional support animals would be restricted to the last 3 rows with no buy up opportunity.

    I would also like to see a surcharge for passengers >200 lbs., say $1/lb. each way.

    Since we hear that more than half of clients fly once or less a year, they will have plenty of time to get over it before they fly again.

  4. Just when Chase added JetBlue as a partner, I can now use my URs to pay for the increase fees.

    (TBH, I don’t check in bags anyhow. Just grumbling…)

  5. I avoid checking bags even when its usually free for me, because i hate wasting time waiting at baggage clain but the problem with raising the fees is it causes all the cheapskates to try to cram their frickin oversized bags on to the plane which causes delays and disputes. Cheapskates are the worst for air travel, they always want the cheapest price and reward terrible practices by airlines.

  6. $25 is a red line. We would not under any circumstances envision increasing to $30.

    Until the day after Delta does.

  7. Air Canada and WestJet – the 2 largest airlines in Canada announced the same increase (from $25 to $30) on the same day. Collusion?

    They say it’s because fuel prices have increased.

    Hmmm….so when fuel prices were low over the last 18months, they didn’t reduce prices (baggage or flights) but this is OK?

    Ridiculous. Should all be investigated.

  8. As a JetBlue Mosaic who flies often to the Caribbean, I was blindsided by the increase. Usually, two checked bags are free, third has a $100 fee. Along with the increase to $30, that third bag fee increased to $150 from $100. I had to fight to pay the lower amount. Penny wise and pound foolish by JetBlue, as I was ready to relinquish Mosaic and never fly them again. They would lose $20k++ in fare revenue annually over trying to squeeze $50 extra. PLAIN DUMB AND GREEDY.

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