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May 2, 2019

Airlines collected more than $28bn in global baggage fees in 2018

Airlines across the world earned approximately $28.1bn in revenue from baggage fees in 2018, an estimated increase of 110% from 2014, a report by IdeaWorksCompany and CarTrawler has revealed.

Airlines across the world earned approximately $28.1bn in revenue from baggage fees in 2018, an estimated increase of 110% from 2014, a report by IdeaWorksCompany and CarTrawler has revealed.

The CarTrawler Global Estimate of Baggage Fee Revenue report shows that money earned from luggage charges made up for 3.2% of global airline revenue compared to 2014 figures, where such fees accounted 1.8%.

The report further revealed that global ancillary revenue for airlines increased to $92.9bn worldwide for 2018.

It provides a worldwide summary of baggage fee policies for the top 20 airlines.

“It is no surprise that baggage fee revenue has grown by a similarly huge margin, in terms of both monetary value and as a percentage of overall global airline revenue.”

The presence of a very significant low-cost carrier industry has led to more bag fee activity in Europe and North America.

However, the implementation activity of bag fees by some major global network airlines was also observed in the last two years.

CarTrawler chief commercial officer Aileen McCormack said: “The value of airlines’ a la carte revenue, or optional extras that customers can add to their basic airline fares, has risen dramatically in recent years, growing by 128% between 2014 and 2018.

“So it is no surprise that baggage fee revenue has grown by a similarly huge margin, in terms of both monetary value and as a percentage of overall global airline revenue.

“This overall trend reflects traditional airlines’ strategy of embracing a la carte revenue alongside low-cost providers, offering customers the best-value solutions in a transformed marketplace.”

Only half of airlines listed under the top 20 non-low-cost carriers in the report depend on traditional method of including checked baggage as a feature for all fares. The remaining airlines have implemented bag fees on a portion or the entirety of their route network.

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