Airlines Collected More Than $1.1 Billion in Baggage Fees in Q3

Dec 14, 2016

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We love to help our readers avoid as many fees as possible. If you’re able to take advantage of credit card benefits, checked baggage fees are some of the easiest charges to avoid. However, that hasn’t stopped airlines from hitting yet another new baggage fee record. From July through September 2016, US-based airlines collected just over $1.1 billion in baggage fees. This tops last quarter’s new record by almost $28 million.

We all know low-cost carriers make their money by charging extra for baggage, seat selection and more, but it’s still legacy carriers that continue to cash in the most on baggage fees:

Rank Airline 3Q 2015 3Q 2016 % Change
1 American 292,089 288,124 -1%
2 Delta 236,890 228,971 -3%
3 United 184,740 185,609 0%
4 Spirit 77,328 113,217 46%
5 Frontier 56,582 84,962 50%
6 JetBlue 42,717 59,548 39%
7 Allegiant 39,934 45,168 13%
8 Alaska 34,127 39,297 15%
9 Hawaiian 21,965 22,332 2%
10 Virgin America 16,094 17,651 10%
11 Southwest 11,542 11,346 -2%
12 Sun Country 4,312 3,499 -19%
13 Island Air Hawaii 572 1,081 89%
Total 1,018,892 1,100,806 8%

Baggage fees by airline for 2015 Q3 and 2016 Q3. Revenue reported in thousands of US dollars. Data courtesy of the Bureau of Transportation Statistics.

While legacy carriers have seen revenue from these charges flatline, American Airlines, Delta and United still top the list for baggage fees. These airlines collected a combined $703 million in fees from July-September, accounting for nearly two-thirds of the total bag fees across all airlines.

American Airlines topped the list for the tenth quarter in a row. However, AA was one of only four airlines that had a reduction in baggage fees over the same time last year, along with Delta, Southwest and Sun Country.

Spirit Airlines is piling on the bag fees. Image courtesy of Tim Boyle of Getty Images.
Spirit Airlines is piling on the bag fees. Image courtesy of Tim Boyle via Getty Images.

Meanwhile, Spirit (+46%) and Frontier (+50%) continue their explosive growth in bag fees as more budget-conscious flyers are attracted by their low base fares. For these travelers, hopefully the price was still cheaper after paying the bag fees.

Although you may pay more in baggage fees than the cost of your ticket on these low-cost carriers, overall, baggage fees are a small percentage of airline revenue. Over the same July-September range, US -based airlines collected $44.4 billion in operating revenues. This means that the $1.1 billion in bag fees account for less than 2.5% of operating revenues.

While many of our readers probably already know how to avoid paying avoidable baggage fees, let’s review the ways that you’re able to do so:

1. Get a Co-Branded Credit Card

The easiest way to avoid checked baggage fees on most airlines is by having an airline credit card. Many airlines offer at least one free checked bag on at least one of their co-branded cards. Here’s the airline-by-airline breakdown of which cards will get you a free checked bag (or two):

  • American: Citi / AAdvantage Platinum Select World Elite Mastercard, CitiBusiness / AAdvantage Platinum Select World Mastercard, Citi / AAdvantage Executive World Elite Mastercard
  • Delta: Gold Delta SkyMiles® Credit Card from American ExpressGold Delta SkyMiles® Business Credit Card from American Express, Platinum Delta SkyMiles® Credit Card from American Express, Platinum Delta SkyMiles® Business Credit Card from American Express
  • United: United MileagePlus Explorer CardUnited MileagePlus Explorer Business CardUnited MileagePlus Club Card (first 2 bags), and United MileagePlus Club Business Card (first 2 bags)
  • JetBlue: The JetBlue Plus Card and The JetBlue Business Card
  • Alaska: Alaska Airlines Visa Signature credit card
  • Hawaiian: The Hawaiian Airlines World Elite Mastercard
  • Virgin America: Virgin America Visa Signature Card and Virgin America Premium Visa Signature Card

The baggage allowances vary across these cards, but each allows at least one free checked bag for the cardholder. Some cards offer free checked bags for others booked on your same itinerary as well.

Unfortunately, some of the biggest bag fee collectors — Spirit Airlines (Spirit Airlines Mastercard), Frontier (Frontier Airlines World Mastercardand Allegiant — have co-branded credit cards that don’t offer a free bag.

2. Fly Southwest

The last major airline to still offer complimentary checked bags is Southwest. Each passenger can check two free bags — including golf bags and skis — up to 50 pounds and total dimensions of 62 inches. Overweight, extra-large and additional bags will set you back $75 each. It seems there were at least 151,000 of those bags checked between July-September, accounting for Southwest’s $11.3 million in baggage fees.

3. Wipe out Baggage Fees With a Credit Card Fee Reimbursement

Some premium credit cards offer travel fee credits that can be used toward airline fees such as baggage costs. These include the Chase Sapphire Reserve ($300 per year), the Ritz-Carlton Rewards Credit Card ($300 per year), Citi Prestige Card ($250 per year), The Platinum Card® from American Express ($200 per year) and the Premier Rewards Gold Card from American Express ($100 per year). If you weren’t able to avoid baggage fees otherwise, using a travel credit could be a great option.

Or, you can use points earned on your Capital One Venture Rewards Credit Card, Bank of America Travel Rewards credit card or Barclaycard Arrival Plus World Elite Mastercard to get a statement credit for your baggage fees. However, you’ll likely want to pay for your bags when you purchase your flight if you plan on using points from your Barclaycard Arrival Plus — which has a sign-up bonus of 70,000 miles after spending $5,000 in the first 90 days — as the minimum redemption is 10,000 miles ($100).

4. Earn Elite Status

Easier said than done, but earning elite status on any of the top three bag fee-charging airlines — American, Delta and United — will earn you a free baggage allowance. Even base-level elite members (American Gold, Delta Silver and United Silver) are allowed to check one bag for free on domestic itineraries. Meanwhile, top-tier members can check up to three free checked bags.

Featured image by Photo by John Greim via Getty Images.

What’s your strategy for avoiding checked bag fees?

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