BriGuyinHou From United States of America, joined Apr 2008, 122 posts, RR: 0 Posted (7 years 7 months 1 week 6 hours ago) and read 1642 times:
am curious to know if airlines make profit on the additional baggage fee of $25. Does anyone here know or have an idea what an airline's costs are to fly one 50lb bag and how much profit (if any) do they realize by charging the now standard $25 fee.
An idea popped into my head that perhaps as a sales promotion an airline could charge $0 for the first bag; $25 for the second; and $10 for the third. Would that cover the costs associated with transporting the extra baggage? Would it be a good way for an airline to also build sales without reducing fares.
By the way, this is my first post. I have been a long time reader (years!), and I feel like I've gotten to know some of you. It is a pleasure to meet you all!
I've travelled the world and the seven seas. Everybody is looking for something.
Flyibaby From United States of America, joined Aug 2004, 1020 posts, RR: 5
Reply 1, posted (7 years 7 months 1 week 6 hours ago) and read 1636 times:
Welcome to Airliners!
All fees are basically pure profit. In the case of overweight or additional baggage however - it really will in all reality go to the fuel price. Every pound of weight just has to be pushed a little harder by the engines, raising RPMs ever so slightly. This in turn drives your consumption up. I think it is really a fair deal overall. If passengers decided to smarten up and only pack one bag - and utilize their carryon a little better...then the airline still makes out because they arent carrying as much weight anyway....causing a better fuel burn.
DaCubbyBearBar From United States of America, joined Apr 2008, 76 posts, RR: 0
Reply 2, posted (7 years 7 months 1 week 5 hours ago) and read 1614 times:
I would think that this would be pretty profitable for an airline. $25 to transport up to 50 pounds a couple hundred miles miles is good money. Maybe OPNLguy can tell you how gallons of gas would be required to transport 50 pounds say 800 miles. All the airlines that have added the second bag fee are doing it to help cover costs, but they are probably looking at you checking that second bad again on the return portion, for another $25. The aircraft barely notices that extra 50 pounds, so the burn is pretty minuscule.
Go Cubs Go Hey Chicago whaddya say the Cubs are gonna win today
Clipper136 From United States of America, joined Mar 2006, 341 posts, RR: 0
Reply 3, posted (7 years 7 months 1 week 4 hours ago) and read 1575 times:
I second the Welcome.
The US Airways 1Q08 conference call (I read the transcript on-line) has a pretty good explanation about why the airlines is charging the bag fee and charging for "preferred" seating. Its not about covering the cost to fly baggage around, but is instead a way to raise revenue without increasing the fare. They call it ala carte pricing. Instead of increasing the fare for everyone across the board, they can have an extra $50 to $100 over the fare paid for those passengers that "choose" to use that service.