Once Derided, Airline Fees For Large Carry-On Bags Now Mainstream

In 2010, Spirit Airlines announced the world’s first ever charge for large carry-on bags. The move was roundly criticized by media and consumer groups, and many predicted the idea would fail quickly and be reversed. Ten years later, more airlines have employed this concept and found out how well it works. EasyJet, a major airline in Europe, just announced that they will adopt this practice beginning in February 2021.

The carry-on charge is now mainstream and other airlines are likely to adopt the practice eventually.

Origins Of The Idea

Unlike many fees that airlines charge, the carry-on charge was not driven by a need for more revenue. In 2010, Spirit found itself in a position where many flights were delayed because all the carry-on baggage would not fit in the overhead bins. This required the airline to “gate check” the bags, separating them from customers and taking time in the boarding process. In an effort to improve the boarding process and reduce the time the plane is on the ground, Spirit identified onboard baggage as a primary cause of the delays.

Earlier, Spirit had begun charging for all checked baggage so they realized that the economic incentive the airline created was to bring more bags on board to save the checked bag fees. The answer then seemed obvious: neutralize the economic incentive so that more people will check bags rather than bring them onboard. The idea for the carry-on charge was born, and the next priority was to operationalize it.

Initial Reactions

When first announced, media and consumer reaction to this idea was highly negative. The Today Show said that the idea would go over like a “Fart in Church”, populist politicians stated this fee should be made illegal, and many predicted it would fail using phrases like “bonehead move” and “no one will accept this.” Yet, when the policy actually became effective months after the announcement, passenger reaction was muted and most just brought fewer bags or checked bags that they otherwise would have carried on.

After a few months of the fee, initial shocks subsided and the policy was Spirit’s alone until another US low-cost airline, Allegiant, adopted the policy. Then Frontier added it for some customers, and now EasyJet, a large and important airline in Europe, announced that they will add the charge beginning early next year. With the emotion aside, each of these airlines have realized the significant benefits that this policy offers.

Operational Improvements

The operational improvements that drove this policy initially have proven accurate. Not surprisingly, people react to economic incentives in predictable ways. The charge for carry-ons means fewer people bring carry-ons, and that makes boarding go more quickly, deplaning is faster when everyone isn’t reaching up for a bag, and planes can spend less time on the gate. Also, checked bag systems are quite reliable and so putting more volume through these systems does not add any real stress. On-time performance improves.

Not expected but obvious when you think of it is a reduction in flight attendant injuries. One of the largest causes of on the job injuries for this group is helping people with large, sometimes unwieldy baggage, and moving bags around to make everything fit. With fewer onboard bags, there are fewer injuries to backs and arms. This is a very flight attendant friendly policy.

Good Economics

The positive economics of carry-on bag charges are significant. Charging for bags of any type reduces the number of bags carried and this reduces weight, saving fuel. Spirit initially priced the carry-on to be $5 more expensive than checking the bag, creating a real choice for the customers at the check-in counter. This pushes bags to the check-in, meaning the bags enter the airlines’ controlled environment sooner and time is always at at a premium during operations. The time saved on the “turn”, meaning the time the plane sits on the gate, can be used to get more utilization out of the expense airplane asset or to improve operational reliability, or both. This time savings drives economic efficiency and improved profitability.

The revenue collected from carry-ons is also considerable, but again is not the primary motivation for the fee. In many ways this is seen through increases in the checked baggage collection also. Customers notice when the boarding is quicker and those who pay the carry-on fee almost always find space right above their seat for their baggage. In these ways, this is a consumer-friendly policy even when you aren’t paying the fee because it makes your experience better.

More to Come?

The EasyJet announcement will make other airlines look at this again and reconsider. EasyJet is a low cost airline, but they have always been more Target
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than Walmart
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. It has been easy for US airlines to think of this as a fringe policy that only makes sense for the lowest-cost airlines. Yet every airline can benefit from the operational, cost, and revenue improvements when this policy is implemented. During a time when when every airline is struggling to generate cash and stay solvent, ideas that once seemed fringe now make sense. The policy also makes more sense during Covid, since fewer customers are heaving droplets on the customers below them as they stuff their large bag into the overhead bin and passengers aren’t bumping into each other jockeying for position. Expect to see this policy rolled out at more airlines over the coming months and years. How should consumers manage these fees? Remember this phrase when traveling for leisure: take half the clothes and twice the money.