Airlines will “reconsider” their attitude towards baggage

Many airlines have come up with a new way to increase their revenue.

Airlines are preparing a plan to address passenger baggage to boost revenue. Which will most likely meet with resistance from those directly affected. And that’s because the price for checking baggage increases. The amount, of course, will be collected from passengers.

Delta Air Lines, the latest airline to announce price increases, announced last week that raises the cost first checked bag for a passenger with 30 to 35 dollars, and second bags from 40 to 45 dollars. The airline last increased its checked baggage fees in 2018.

American Airlines and United Airlines made similar changes, raising baggage fees by about $5, while JetBlue Airways and Alaska Airlines also raised prices.

Airlines face a double problem that forces them to adopt this practice pricing for your services. Higher labor costs and rising maintenance costs are eating into their income. On the other hand, domestic demand has declined, increasing price competition from airlines.

Charges are an important and growing source of revenue for air carriers. U.S. airlines collected $6.8 billion in baggage fees in 2022, up from $5.3 billion in 2021, according to the Bureau of Transportation Statistics.
That year, American Airlines earned $1.4 billion in baggage fees, less than 3% of revenue in 2022. United received $1.1 billion, or 2.6% of revenue in 2022. Delta earned $980 million, or 2 .1% of revenue in 2022

Those numbers increased in 2023, a record year for travel, according to the Transportation Security Administration (TSA). With airlines increasing prices for the first checked bag by an average of 17%, this figure could rise again in 2024.

Declining ticket revenue
Ticket prices were 6% lower in January compared to the same period last year, according to January Consumer Price Index data. Online travel agency Hopper expects domestic rates to remain below 2023 and pre-pandemic levels for at least the first half of the year.

Hopper chief economist Haley Berg said that an increase in the number of aircraft used on flights helped reduce prices. “The decline in domestic airfare prices comes as domestic flights remained at least 5% higher through 2023 than in 2019,” she said.

However, airline profits are not exactly what is on the minds of travelers, whose incomes are now significantly reduced due to successive crises.

Source link