July 9, 2013 at 11:22 AM ET
Whether you are an airline that loves bag fees or a not-so-frequent flyer who likely hates them, this much is clear: Checked bag fees are spreading from the U.S. to Europe and India.
For the past five years U.S. airlines were the biggest checked-bag fee proponents, along with European low cost carriers such as Ryanair and easyJet. Major European and Asian airlines could sniff that they wouldn’t go there.
These developments are viewed as great news by IdeaWorks Co., which traced the developments in its latest report on airline ancillary revenue, and looks to ancillary revenue as a lifeline for the world’s airlines.
“It’s rather like green shoots poking through a melting blanket of snow,” says the report.
In the U.S., IdeaWorks notes, the 10 largest U.S. airlines have seen their checked bag fees increase 650% in 2012 to $3.3 billion, compared with 2007.
Fewer bags to check means there is less luggage for airlines to lose, and the percentage of mishandled bag complaints per 1,000 passengers has been declining, going from 7.03 in 2007 to 2.97 in 2012, according to the Department of Transportation.
There are dire lessons to be learned in the process, though, and if airlines don’t heed them, there is likely to be passenger rebellion, a media onslaught, and possibly congressional intervention, the report warns.
IdeaWorks laid out a blueprint for checked-bag fee introduction:
IdeaWorks’ hero in bag-fee introductions is Alaska Airlines, which not only introduced a checked-bag fee in 2009, but also introduced a guarantee that passengers would receive their bags within 25 minutes of the airline’s arrival at the gate.
The villain in IdeaWorks’ learnings is Frontier Airlines. Frontier messed up — not because it introduced a carry-on bag fee of $25 to $100 when its Basic fares are booked through third parties — but because it is a complicated policy and wasn’t explained clearly.
IdeaWorks estimates that carry-on bag fee pioneer Spirit Airlines generated $50 million in carry-on fees in 2011. Allegiant charges carry-on fees, as well, meaning there are three U.S. airlines now in this carry-on column.
Barring a consumer rebellion, it’s only a matter of time before Europe and Asia get carried away and get in the carry-on act, as well. They already are beginning to get enthusiastic about checked-bag fees.
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