Airlines Make $7B+ on Bag Fees Alone (But You Can Avoid Paying Them)

You read that headline right: U.S. airlines made a record $7 billion just on baggage fees alone last year, according to the latest data from the Bureau of Transportation Statistics released on Wednesday.

What was once included with any plane ticket (and still is on Southwest Airlines) has become a huge moneymaker for the airlines – and with almost every major airline hiking bag fees by at least another $5 earlier this year, that amount will only grow in 2024 and beyond. Take a look … and remember, these numbers are only for U.S. airlines.

That’s another $1.3 billion in bag fees above what the airlines made on bags in 2019, the last full year of normal travel. Travelers are checking more bags than ever … and airlines are charging more for those bags, too. Bag fees helped U.S. airlines collectively rake in more than $13.2 billion in profits before taxes last year – nearly double last year’s sum and a big surge after several years of bruising losses during the pandemic. 

And the trend for baggage fees is undeniable: They just keep going up. 

Major carriers began charging separately for checked baggage over a decade ago, and they’ve been rising steadily ever since. In fact, it happened again earlier this year.

It started with Alaska Airlines in late 2023 but caused a domino effect, leading every major U.S. airline to raise the fee for checking a bag within the U.S. (as well as Canada, Mexico, and the Caribbean) from $30 to at least $35. Some, like American and United, require you to pre-pay for bags online to get that rate – otherwise, you’ll pay $40 at the airport. JetBlue took things even further, introducing a form of surge pricing for baggage with even higher fees during busy travel periods.

Flying abroad, it gets worse: United, Delta, and American have all raised their baggage fee to a whopping $75 each way when flying to Europe on a basic economy ticket. Meanwhile, ultra-low-cost carriers like Spirit seem to raise their baggage fees once a year, whether you’re checking luggage or just stowing a suitcase overhead.

While charging another $5 or $10 might not seem like much, it adds up quickly with the tens of millions of bags travelers check every year. With those new, higher fees, you can easily expect airlines to clear $8 billion in bag fee revenue in 2024 – maybe even more. 

Don’t let the airlines nickel and dime you. 

How to Avoid Baggage Fees

Pack in a carry-on bag

The simplest way to stop padding airlines’ wallets is also free.

We urge all readers to pack in a carry-on whenever possible. Sure, it saves you money … but it also saves you time at airport check-in desks and baggage carousels, not to mention the stress of possibly losing your belongings.

The one caveat here is that budget airlines charge for carry-on bags – often more than they charge for a checked bag. And United’s basic economy fares don’t include a free carry-on. Neither does JetBlue basic economy, sadly.

Carry your airline’s credit card

Whether you’re flying Delta, American, United, or another major airline, a free checked bag is one of the best perks of having a co-branded airline card in your wallet.

Considering most airline credit cards carry a $95 to $150 annual fee, that benefit will pay for itself after just two or three round-trip flights. Better yet, most of these cards extend the benefit to two, four, or maybe even eight other passengers traveling on your reservation.

And finally, many airlines don’t require you to actually pay with the credit card to get free bags – it’s automatically attached to your frequent flyer number.

Fly the right route

Flying within the U.S. or down to Mexico or the Caribbean, expect to fork over some money when checking a bag. Heading even farther away? You might be able to count on a free checked bag.

It depends on your airline, where you’re flying, and the type of ticket you bought.

• So long as you bought at least a main cabin ticket to Europe or South America, most airlines will give you one free checked bag – but not with the cheapest basic economy fare
• Even many basic economy tickets (like Delta basic economy, for example) to far-away destinations like Australia and Asia now include one checked bag

Stick with Southwest

While the rest of the airlines worldwide started charging for checked bags long ago, Southwest is the lone holdout.

You still get two free checked bags with every Southwest fare. It’s one of the things that make Southwest stand out. And the airline’s CEO says that isn’t changing anytime soon.

“We’re not going to charge for bag fees,” former CEO Gary Kelly promised years ago, before taking a shot at his competitors: “They unbundle, and we don’t.”

Bottom Line

Airlines have turned the once-free checked bag into a consistent money maker. And the amount of money airlines make when you check a bag keeps growing and growing.

It’ll be worse than ever this year… unless you know how to avoid bag fees altogether.