That $25 checked bag charge at the airport may feel, at best, like an annoying penalty on top of the already high cost of flying. At worst, travelers feel they're being gouged by airlines as well as inconvenienced, as they spend valuable time jockeying for limited overhead bin space.
Yet a new study finds that checked baggage fees actually improved departure times for most airlines. Starting in 2008 when the fees were imposed, customers began bringing less luggage and airports experienced lower baggage handling demands and speedier operations.
The fees "discouraged customers from checking bags, making operations of the airlines more efficient," says Mark Ferguson, a professor of management science at the University of South Carolina, who co-authored the paper, published recently in the journal Management Science. That more efficient operation led to reduced delays and fewer baggage complaints, the study found.
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Citing rising fuel costs, the majority of US airlines began charging for checked bags in 2008 — first for one bag, then for two. Those baggage fees became a large source of revenue for the airlines, which climbed from $1 billion in 2008 to $3.8 billion in 2015.
But passengers argued the extra time dealing with carry-on luggage increased flight delays. Ferguson, colleague Vinayak Deshpande, and their former students decided to empirically answer whether checked baggage fees were hurting or helping departure times. They collected publicly available data on two million domestic flights between May 1, 2007, and May 1, 2009 — before and after mostUS airlines began imposing fees for checked luggage.
At the time, Southwest was the only airline which refrained from charging for checked baggage, so the team used the airline as a sort-of control group, to see how it fared against airlines that did impose the fees.
In the period shortly after fees were instituted, airlines experienced a significant improvement in on-time departures, improving median departure times between 3 and 4 minutes and reducing average departure delays by 1 to 2 minutes. If that doesn't sound like much, consider that even a short delay for a plane making 5 to 7 flights per day can lead to the severe delay or cancellation of the final flight of the day.
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Interestingly, even Southwest's departure times improved. The authors speculate that fewer checked bags at other airlines reduced demand for behind-the-scenes airport operations such as baggage handling and security checks. Since airlines share these resources at airports, that time-savings spilled over to Southwest.
Yet Southwest's ongoing "bags fly free" policy could be hurting the airline in other ways, the authors suggest, because the airline could be offering more flights per day with speedier boarding times if they charged for checked bags.
The study can't answer whether the baggage fees are an overall positive change, as it did not include any customer satisfaction assessment, says Ferguson. Despite the departure time and revenue benefits, the fees may have negatively affected customer-buying decisions. The team is now investigating how customers make airline choices based on additional fees and on-time departure performance.