Airline travel is way too cheap, and checked bag fees make perfect sense

When adjusted for inflation, airline fares have gone way down over the past 15 years, while fuel costs have soared. Is it any wonder airlines are going bankrupt left and right?

American Airlines

Here’s an opinion I know many people will disagree with: Airline travel should be way more expensive than it is. And those checked baggage fees are totally justified – even for the first bag.

I know these beliefs put me in the minority, but it’s a fact that many airlines have struggled to stay in business (American was the latest to file for bankruptcy), and the bottom-line reason is that they’re simply not charging enough for their services.

In the past year, I’ve purchased round-trip flights from Chicago to Los Angeles for $150 and from Chicago to Miami for $144, all fees included. You’d pay at least triple those amounts to go by Greyhound or Amtrak, which are supposedly the cheapest means of travel!

I also saw round-trip flights to Iceland for $500. Those are insane prices! As a consumer, I’m thrilled to see these deals. But as a person with some reasonable level of concern for our economy, I can see why the airlines are struggling.

This is anecdotal evidence, of course, and you could locate expensive flights as well. But overall, flight costs are just too low.

midway sirport signs

Flight costs have not kept up with inflation

I’m not an expert on aviation, so I don’t necessarily know where to find the most reliable data on the subject. But I know that as the costs of gasoline and manpower have soared over the past two decades, flight costs have not kept up.

This site has an interesting chart, for those who like seeing stats in visual form. Here’s the key bit of news from the piece: “When calculated in 1995 dollar value, the average fare price has decreased about 20 percent in the last 15 years.”

So fare prices are going down – way down – when adjusted for inflation, even while fuel costs have gone through the roof. It’s no wonder that many airlines are hemorrhaging money.

southwest airlines

Pilot salaries and benefits are dropping

Another reason flight costs should go up is that pilots need to be paid more. Nobody really trains to be a pilot anymore. When most of the current pilots retire within the next 20 years, there’s going to be no one left to fly the planes. One way to avoid this problem is to raise pilots’ pay, which can only happen by charging substantially more for flights. It will suck for those of us who love to travel, but it must be done.

Hero pilot Chesley Sullenberger, who successfully landed his disabled plane in the Hudson River in 2009, appeared before Congress after that incident and gave heartbreaking testimony about how many commercial pilots are struggling to make ends meet.

He said that many are now forced to take second jobs because their pay has been slashed so dramatically they can’t support themselves on a pilot’s salary alone. That revelation is shocking and highly troubling.

Those interested in aviation issues should watch the video of his testimony to get some context on the pilots’ point of view. Check it out here. (Fast forward to 2:47 to get right to the good stuff.)

baggage claim

Why charging for checked bags is the best solution

The main reason people are upset about paying for checked baggage is that they didn’t have to pay for it in the past. It’s a psychological thing. It’s all in your head! I get it – when companies give consumers something (e.g., free bag checking) and then take it away, it can be upsetting. But consider the alternative.

Which would you rather have: A 20%, across-the-board price increase on all flights everywhere in the world. Or, an effort to keep base flight costs relatively stable, and instead start charging for checked bags, meals, and other amenities?

The latter option is certainly better, because it still gives budget travelers some options. You don’t have to buy a meal. And you don’t have to check a bag. If you really want to pinch your pennies, there are ways around these airline fees. There would not be any way around an all-out base fare increase.

Frankly, charging for checked baggage makes sense. If you check a bag, you’re requiring extra work on the part of the airline, which needs to inspect the bag, transport it to the plane, and transport it to the terminal after landing. That extra manpower costs money. So logically, checked bags should cost extra.

air baggage

Some airlines have found a way to post profits, even in these difficult times for the industry. As ABC News points out, airlines that are already profitable and theoretically don’t “need” baggage fees are putting the revenue from such fees to good use by, for instance, buying new, more fuel-efficient planes – something that is long overdue in many cases!

Airlines are not making record profits like oil companies

If airlines were making multi-billion-dollar record profits like oil companies and were trying to gouge every last penny from consumers, I would absolutely feel differently. But that’s not the case. Most are just scraping by, trying to compete with low-cost competitors with lower operating costs.

These companies are fighting for their lives and they’re trying to avoid bankruptcy by instituting new fees. I’m pretty sure that’s how our economy is supposed to work. What’s wrong with that? What am I missing?

I haven’t studied the inner workings of the airline industry. This is just my take as a regular dude who travels. I welcome feedback from anyone who wants to present the other side of the story.

Am I out to lunch on this one, or do you agree that airline fees aren’t so bad?

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About Scott Shetler

Scott is a Chicago-based journalist and blogger who seeks out quirky sights and awesome destinations throughout North America and beyond.

22 comments on “Airline travel is way too cheap, and checked bag fees make perfect sense

  1. Yer full of it. (meant nicely)

    (and I usually know when my chain is pulled)

    Let’s face it, These people are capitalists – they know the market and will play it to us, so we now pay $5.00 to Myrtle Beach and $850 to Philly. If it don’t work – they will find a market that will. Quirk… don’t worry ’bout ’em. The market will let them thrive or die. (as well they should)

    • I saw those $650 flights to Philly. That’s obviously out of line. But I doubt those fares will stay that high given the public outrage.

  2. First, full disclosure: I work for a travel technology company.

    Second, I think you’re right on—especially since air travel is so much cheaper than it used to be. Back then, we all paid for checking a bag, whether we were checking one or not. It was included in the price of our ticket. Same goes for meals. We used to all pay for them, and let’s not forget that everybody used to complain about airplane food when it was included.

    Just paying for what you want—that’s the way to do it. And, yes, if you’re checking a 70-pound bag, you should have to pay extra for it. Makes total sense to me.

    Plug: We have a website, http://www.iflybags.com, that calculates baggage fees and allowances based on your trip details. Worth checking out if you know you’re going to be checking bags.

  3. Yes, it does appear that flights are getting cheaper. They are! But this is to do with a marketing approach where companies just want bums on seats. The end result is they have opened up a whole new market of travellers, who previously would never have travelled. Now you can travel around Europe for next to nothing. In France for example people used to have their holidays locally, say on the French Riviera, but now they jump on easyjet and go everywhere and anywhere for less than local transportation. We are all grateful for it! Remember airlines used to go out of business 30 years ago as well!
    John in France recently posted..The Louvre – Kim Kardashian creates havoc?

    • I don’t think the numbers are fudged at all – flights really are cheaper than they used to be. I’m happy about it as a traveler myself, but it’s probably not healthy for the industry!

  4. I think airline should care more about their quality than lowering prices. I rather pay more for a good, well rested, healthy pilot, fully inspected, well built airplane, and better food than ummm, shitty food and bad service.

    When I travel I actually tend to choose medium price airlines for at least decent seats and service…especially if I am trapped in a tight space for like 10 hours at a time. >.<
    Annie – FootTracker recently posted..Tokyo Winter (3) Traveler’s Pit Stop @Oiwake Dango

  5. I am wary of any argument which would have air travel once again the preserve of the rich. Some companies are struggling and some are doing well – that seems healthy to me. No, they’re not making the obscene profits that oil companies are. Do we want them to?

    Shareholders are playing the game and can look after themselves. I think it’s good to see an industry have to really fight for its customers.
    robin recently posted..Los Invitados

    • The argument is that without these extra fees, air travel would indeed become the preserve of the rich. Because of the baggage fees that some customers pay, budget customers can still get cheap flights. That’s my take, anyway.

  6. Is there a lot of competition between the airlines over there? That definately lowers the price, here in New Zealand it’s cheaper to fly to Australia than it is to fly domestic!! I think there’s only one main airline flying within NZ now.

    • In some places the competition is going away, as airlines cut back less profitable routes. That is definitely going to drive up prices – probably too much!

  7. Airline fees are low because of competition from so-called ‘no-frills’ or budget airlines, not because of the passengers. If the airlines weren’t charging for bags and meals in the past, that’s definitely a bad business model and one that could not be sustained. Frankly, I prefer bags and meals were included in the fare like they used to be.
    InsideJourneys recently posted..What to Do When Rain Threatens Your Vacation

    • I just bought a $120 roundtrip flight from Chicago to San Diego so I’m thrilled about deals, too! But I know that Southwest won’t be making any money off me.

  8. The point that is missed in this argument is that of volume. If prices were raised, then the demand for seats would drop and perhaps not end up with more money in the airline coffers. This is why those cheap seats are so limited, and why they overbook flights. I believe all of the flights are balanced to have the maximum load of people on them. Empty seats are losses.

    So there is definitely a point to raise prices and fees, but it has to be done without lowering demand. I think this is why the fees are added. The “main” price can be advertised as low and then the “real” price can be inflated back up to where they need it to be. I too miss the days where food and bags were a part of the package. Especially the drinks aspect of things now that the draconian anti-water regulations of the security points are here.

    It’s not an economic thing, its a psychological one. I get that if it was in the price of the tickets, I might likely be paying more than if I pay out of pocket, especially if I decline to eat the peanuts. The point though is that with all the ads and extra fees, it makes the airlines in my mind into corporate greedy slobbering monsters. This is especially true when I read how the pilots are treated. Every time I am asked to pay for something or have to look at ads on my seat back, it makes me feel less like a valued customer and more like a consumer captive audience to be sold at. I am nervous enough of a flyer without that in my head.

    So I’m all for raising prices if it includes a level of service that makes me feel like I am treated as a human not a bum-in-a-seat.
    Andrew recently posted..The Best Gifts are Memories

    • Good points… I think we really are just bums in seats, though. That’s all we are on Greyhound or Amtrak or a local subway system, so why should it be any different on planes? It’s weird that we’ve been conditioned to expect to be treated like kings and queens when we fly. The fact that there is any food service at all on flights shorter than 5 hours – even snacks – really doesn’t make a lot of sense when you think about it. It’s part of an outdated business model. Logically, the Amtrak model – food is available but you have to pay for everything – seems to make the most sense.

      Of course, if they’re going to offer me free juice and nuts, I’ll gladly accept them 🙂

  9. I guess its very easy to forget that we are paying a very reasonable rate while we travel through air at a really high speed and arrive safely. We don’t acknowledge technology and how much we’ve progressed compared to our grandparent’s generation or even our parents!
    But I must say that sometimes, the airlines really aren’t reasonable and cause a lot of anger!
    Anji recently posted..Local Travelling with Knok

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