While the forty bucks that airlines charge travelers without status or a higher fare class to check a bag may seem insignificant compared to what they receive for the main ticket, checked baggage fees bring U.S. approximately $5 billion in profits each year.
According to a recent calculation by Upgraded Points, this can end up being up to 20% of total revenue for low-cost airlines such as Spirit and Frontier and approximately 14% for mainstream ones like Delta and United.
And while airlines generally hold off on raising baggage prices and do so at around the same time as other competitors (JetBlue and American Airlines both raised the cost of checking a bag within a few weeks of each other at the start of 2024), the rising cost of fuel due to the war in Iran has brought the first off-script price hike.
“As we experience rising operating costs…”: JetBlue on baggage price hikes
On its website, JetBlue Airways started listing the price for a first piece of luggage on routes within the U.S. as well as to nearby Caribbean and Latin American destinations from $35 to $39.
While no changes have been made for prices on more faraway destinations, the airline is also adding an additional $10 fee for purchasing a bag less than 24 hours before the flight and raising the fee for peak holiday travel periods from $40 to $49.
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On the week that began on March 30, fuel prices across the U.S. reached an average of $4 per gallon which marks the highest price since 2022. Airline leaders have repeatedly signaled that carriers will eventually have to start passing on the rising cost of fuel to consumers through ticket prices.
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“We recognize that fee increases are never ideal”
“As we experience rising operating costs, we regularly evaluate how to manage those costs while keeping base fares competitive and continuing to invest in the experience our customers value,” JetBlue said in a media statement.
Delta Air Lines has previously also estimated that an increase in oil prices of just one cent per gallon will increase its fuel costs by $40 million per year. U.S. airlines which have higher fuel costs due to a larger number of older and less fuel-efficient aircraft, including Southwest and American Airlines, are expected to sustain even bigger losses.
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“Adjusting fees for optional services used by select customers, such as checked baggage, allows us to continue offering more competitive fares while delivering the onboard experience our customers love, including complimentary snacks and drinks, unlimited, high-speed Wi-Fi and seatback entertainment screens,” JetBlue said further in its statement on justifying the price increases. “While we recognize that fee increases are never ideal, we take careful consideration to ensure these changes are implemented only when necessary.
While JetBlue is currently the only airline to officially raise prices in connection to fuel costs, airlines frequently follow each other in dong so once a competitor makes the first leap — a number of analysts are predicting that a number of others will follow JetBlue in the coming weeks as fuel prices continue to rise.
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