Airlines in the U.S. charge separately for checked bags in order to reduce tax | Hacker News Reader

Airlines in the U.S. charge separately for checked bags in order to reduce tax

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42 pointsmooreds93 comments

I actually wish the airlines did the reverse: allow 2 free checked bags but charge for carryons that don’t fit under your seat.

It is the carryons that make boarding stressful, where everyone worries that if they are not at the front of the line the bins will be full by the time they board. Also, they slow boarding as people stand in the aisles looking for an empty overhead bin or else trying to play Tetris to fit their luggage into an almost full bin.

From reading the article, it seems that may get the same tax benefits as the checked baggage fees.

In my experience the newest aircraft are solving the overhead bin space question with larger bins that are nearly 1:1 in terms of passengers vs number of standard carry-ons that they can fit in the bins.

https://www.boeing.com/commercial/737max/space-bins

Pretty sure Airbus has some similar thing.

Not saying I expect the anxiety to fully disappear/that there will never be a forced gate checking of a bag again in the future, but I do think this will become much less of a problem than it's been in the past 5-10 years.

Airlines want to optimize for all space being used on the plane, not boarding speed. Free checked bags would mean many empty overhead bins, which is wasted space. When the overhead bins are full, it leaves more space in the cargo area that they can sell to other companies who want to use it.

Not strictly true - airlines also optimise on turnaround time. There's likely a sweet spot of bins packed vs landing-to-takeoff time.

It's a pretty polarizing subject. I am in the "just check all my crap and be done with it" camp, but many people you'll have to pry their roller bag carry ons from their cold dead hands.

If you have expensive electronics or a controlled substance prescription, you're a fool to let them pry your bag from your hands. United recently forceably checked my carryon bag (because I hadn't paid extra to be in a lower boarding group) on a long international flight (multiple connections) where I would be without my belonging for 40 hours. Pretty rough when you will start going through withdrawals after 8 hours. It was like the end of the scene from Planes, Trains, and Automobiles where the car rental lady (after receiving abuse from Steve Martin's character, which didn't happen in this case) coldly tells him, "you're fucked."

I will go to great lengths to keep control of my luggage in my own hands. Haven't checked luggage in many years.

I have a backpack that fits in the overhead. I don't pack more than will fit in there. My personal item is usually my work laptop, not letting that go. I see no reason to check anything.

You've never had the airline lose your checked luggage, huh?

Yeah, I am with you on this one. And even with that worst case scenario dodged, checked luggage experience just sucks.

After landing, instead of just up and leaving the airport, you gotta go to your baggage claim and wait for your flight to get processed. Sometimes it easily adds over an extra hour to the experience (and even the best case scenarios still take me about 30-40 mins extra at least, and that’s domestic flights).

I live in a tiny city. I get the best of both worlds by gate-checking my bags. I don't have to find carryone space, and my bags are waiting for me at the gate when I get off the plane. I also get to have both a window and an aisle seat on the plane since the plane is so small.

I've had bags destroyed or lost by baggage handlers more times than I can count. No thanks. I never check bags anymore.

Indeed! It only takes a couple rounds of that mess to learn that anything you actually need has to be carried on, and once you're used to packing all of your necessities into carry-ons, it's easy to wonder "why am I bothering to bring all this other stuff"?

The only things that need to be carried on are things that you need for the first two days. After that your luggage will be found and you have it again. If you only travel for a 3 day trip then carry everything on. However for longer trips I like to have a weeks worth of clothing (particularly if it is personal so I don't have to spend time and money at a laundromat). It is very nice to have a weeks worth of clothing but not have to carry it all with me on the plane.

Actually on the way home I prefer if my luggage is lost as then they deliver it to my house for me instead of my having to carry it.

Gate check is different from checked bags. I have my bags in my possession until the door of the plane where I drop them off and someone else picks them up to put on the plane. Then when I get off the plane my bags are waiting right at the door of the plane (sometimes I need to wait 5 minutes). The small planes I normally fly have tiny overhead compartments that can barely handle a small purse.

If you live in a large city and only travel to other large cities you will never see the above.

And some folks have to put their bags in an overhead bin further back in the plane than their seat. This really slows things down when getting off the plane, as they have to fight their way back before going forward to leave.

As a previously frequent traveler on both domestic and international flights, pushing your way through to the back while everybody is standing up waiting to deplane doesn't have to slow things down if those passengers waited until enough people have deplaned.

This courtesy doesn't help those passengers who need to catch a tight connection, but if everybody else followed this more polite protocol then deplaning would be less stressful and likely quicker for everybody.

I've always thought it was price discrimination, so the people who really want a cheap flight can put up with less bags instead of not flying at all

It can be both.

As someone who travels light (even with kids) I appreciate it. I check 1 bag at most and it incentivizes us to pack smartly. The people who want to bring a lot of bags can pay for it as needed.

Can you share your strategy regarding smart packing?

Discrimination? Or just charging for service/capacity?

Its a specific term, https://en.m.wikipedia.org/wiki/Price_discrimination

“Price discrimination” is an economic term. It doesn’t carry the same negative connotations as “discrimination” in a social sense.

I would guess OP is using the other definition [1]

"DISCERNING, JUDICIOUS discriminating buyers"

[1] https://www.merriam-webster.com/dictionary/discriminating

I'm okay with bag fees. There is a real cost to carrying extra bags. I pack light and don't see why I need to subsidize other people if it's bundled.

On the other hand, fees for things like seat assignment (regular seats, not just the exit rows and such) are just an annoying cash grab.

AA will make you pay extra to "choose your own seat" ($75-$150 extra per ticket for basic economy -> main cabin) and then block off all but 3 rows as "premium seats" so that you can pay $30+/leg/person to sit with your party/travel companion after paying already paying extra. Better get to the airport early and beg the gate attendant or spend an additional $240+ (1 layover, 2 passengers)!

If you book a codeshare they don't even try to let you choose, they simply put in the fine print that the choosing your own seat perk "may not apply to partner airlines".

I hate it.

It's not only that - the bag prices mess with price comparison web sites so much, that it's impossible to find the best deal. Win-Win for the airlines.

Kayak has mostly solved this. You select number of carry-on and checked bags, and it uses the inclusive price.

Kayak/Google flights/expedia all allow you to select number of carry on and checked bags.

It's all because opaque pricing allows airline companies to make more profits.

Maybe I just fly a lot, but baggage fees are pretty clear along with limits.

But they don’t appear on price comparison sites. So if you’re shopping around and you see a Delta flight for $300 and a Spirit flight for $200 you have no idea which is actually cheaper. Every time I’ve flown Spirit the baggage price has been variable (based on miles flown maybe? No idea) so it’s not like comparison sites could even add it if they wanted to.

I don't know which sites you use, but Kayak and Google Flights both let you input the number of checked and carry-on bags you're traveling with and include those fees in the comparison.

Right, and they don’t take into account things like “my credit card gives me 2 free checked bags on United”. So in the end it’s still too opaque to really compare prices easily.

Sounds like the complication is your credit card, not the airlines or comparison websites.

Google flights lets you add bags and shows/include baggage fees.

For Spirit, baggage fees are also clearly listed here: https://www.spirit.com/optional-services

> But they don’t appear on price comparison sites

Depends on the website. Skyscanner include that kind of thing, as well as seat pitch, if food is included, etc.

Airlines like Spirit and Frontier are just the "bus fare". Want anything extra, like a carry on bag? You'll have to pay for it. Learned my lesson, will just book Southwest or similar next time.

Why would that be the airlines problem? The price comparison sites make their money off a different model. Maybe the sites need to fix their logic.

It’s irritating but it’s not the airlines responsibility to support the comparison sites.

Why does it need to be their problem to matter? It's an annoyance, and it can cause enough friction to stop potential customers.

Right, but if you’re not a frequent flier and are trying to just plan a trip, the amount of extra work it takes to determine the actual round trip price (incl. baggage fees) for several different airline is prohibitive.

Many people just pick the cheapest price on cheap tickets or something (which is usually spirit. They famously charge so much for baggage that they end up being more expensive than other airlines)

Don't most of the airfare searching sites let you include your baggage situation into your query? Kayak does, at least. I just assumed the rest did as well.

Last I checked cheaptickets doesn’t. I’ve never used kayak. I just stick with a single airline nowadays.

I don’t fly a lot any more but I haven’t found it to be confusing at all. Even the price comparison websites make it easy to select a number of bags.

I don’t understand these comments about how it’s confusing. It’s all quite clear.

I feel like there's always a tradeoff. In the past year I've flown both Frontier and United. Frontier makes you pay for your bags (except for a single personal item), while United gives you a free carry-on and checked bag.

It would seem as though Frontier is milking you until you look at the ticket price. I calculated that if I took that United flight with Frontier instead and paid for 1 carry on + 1 checked bag (what United offered for free), the flight would still be cheaper than the United flight.

United basic economy does not give you a free carry on or checked bag, and United economy does not give you a free checked bag. And it has been that way for 10+ years.

https://www.united.com/en/us/fly/travel/inflight/basic-econo...

>Carry-on bags are not included unless you're flying to Canada, South America, across the Atlantic or on an international flight across the Pacific.

Ah yes, the famously uncompetitive, highly profitable airline industry, earning a net... 2.7% profit in 2023.

https://www.iata.org/en/pressroom/2023-releases/2023-12-06-0...

Objection!

It’s true investing in the airline industry has been a good way to lose money for a long time.

But citing early post pandemic years to make that point feels misleading.

It’s like saying someone drives badly and instead of pointing to their speeding tickets, it’s like pointing out their car is in the shop with body damage… from a falling tree branch.

All travel was shut down for a while and when it opened up business travel was nonexistent. It’s still down and expected to never return to prepandemic. It’s amazing they made any profit in 2023.

Yes, airlines are not highly profitable but pandemic years are a terrible example due to being a weird black swan event.

>But citing early post pandemic years to make that point feels misleading.

Which years should they cite to avoid misleading others?

https://www.macrotrends.net/stocks/charts/UAL/united-airline...

https://www.macrotrends.net/stocks/charts/DAL/delta-air-line...

https://www.macrotrends.net/stocks/charts/AAL/american-airli...

https://www.macrotrends.net/stocks/charts/LUV/southwest-airl...

https://www.macrotrends.net/stocks/charts/ALK/alaska-air/pro...

https://www.macrotrends.net/stocks/charts/HA/hawaiian-holdin...

https://www.macrotrends.net/stocks/charts/JBLU/jetblue-airwa...

https://www.macrotrends.net/stocks/charts/SAVE/spirit-airlin...

Those graphs all show a giant anomaly.

Cite pretty much any other year than the giant anomaly?

I don’t understand what the point was to linking those graphs, they self evidently answer the question.

Like the graphs all clearly show the giant anomaly period that was cited.

saas_sam wrote that the airlines have very small profit margins.

Your post implied that the data saas_sam presented did not establish airlines had very small profit margins.

The macrotrend links in my post show airlines have had very small profit margins for many, many years.

… okay so yeah yes um ahem. Ahh.

reread my first and last sentences a couple times in the first comment. Perhaps try asking an LLM to weigh in on what the comment meant.

That’s true. Their most profitable year in recent history was 2015, when they had a net margin of 5 percent, or about $10.00 per passenger.

https://www.iata.org/en/iata-repository/publications/economi...

I'll bet there are a ton of people making pretty good salaries and bonuses before profits.

They’re called “pilots” and they fly the plane. The other bonus goes to the jet fuel.

There are a ton of executives too, which might be an issue. As for the workers (including pilots), the should abolutely get paid. I'm just pointing out that "profits" does not show the big picture. Companies have a duty to their employees & customers; as well as their owners (shareholders). Low profit is heralded when it's Amazon, reinvesting in the company. Airlines are also investing back in the company.

Profit margin does show the picture for how profitable a business is. Employees’ pay, including executive, is irrelevant. They are still employees.

Unless you are claiming malfeasance and that shareholders are being fleeced.

An entire industry with low single digit profit margins amongst multiple of competitors indicates a very optimized business. It means the only way you can reduce prices for customers is to come up with a novel way to execute the business, such as new technology.

Profit margin at businesses that have high barriers to entry and low costs to scale are much higher. See software, real estate, pharmaceuticals, finance, etc. And again, the executive pay is irrelevant since publicly listed businesses have shareholders paying attention to that kind of waste (for the most part).

Complained about on a forum where many work for employers who earn 20%+.

percentage != absolute value

This is like saying walmart isn't highly profitable...you make up for it in volume.

Discussing nominal profits when comparing various businesses' "profitability" is almost never productive.

Any business needs a certain amount of cushion to counter volatility, and to earn a return for shareholders. If you had a business with $1M of revenue and $20k of profit, surely you would not expect $20k of profit when you hit $2M of revenue (because 2% profit margin is objectively very low. I have yet to see of successful businesses operate year after year on less than that, and at 0% they become a charity).

Hence profit margin is almost always the relevant figure, especially when you get down to the low single digit percentages.

Checked bags aren't cheaper outside the US...

Not only that, this law was in place before 1962.

That doesn't make it not a loophole.

It makes it not a cause for charging for luggage which started over 40 years later.

Plus it’s not a “loophole” it’s a law.

Planting a seed 40 years ago may, in part, cause a tree to fall on my house at some point.

> Plus it’s not a “loophole” it’s a law.

"A loophole is an ambiguity or inadequacy in a system, such as a law or security, which can be used to circumvent or otherwise avoid the purpose, implied or explicitly stated, of the system."

Moving revenue from fares to fees evades a tax in a way that likely was not anticipated by that law's creators.

> Planting a seed 40 years ago may, in part, cause a tree to fall on my house at some point.

Sure, and a butterfly beating it's wings may have lead to JFK's assassination, but there are way more important factors.

> which can be used to circumvent or otherwise avoid the purpose, implied or explicitly stated, of the system

Did you read the law? It explicitly excluded luggage from the tax. Because the tax was never intended to apply to luggage.

So it sounds like the opposite of a loophole, by your definition.

The implied purpose of taxing airline tickets is to collect taxes on flights. As you noted, baggage fees for all bags was not standard practice at the time, nor for decades later. (I wouldn't know where to start with researching the original intent of this carve-out of the law.)

The loophole's theoretical existence and the loophole's widespread usage needn't correspond temporarily for it to be a loophole. If I find a loophole in "don't murder" laws that've been around for 200 years, it's still a loophole if I start offing people with impunity.

(For example: https://en.wikipedia.org/wiki/Zone_of_Death_(Yellowstone) is a potential loophole that existed since 1890, but discovered in 2005, that clearly conflicts with the intent of the Sixth Amendment)

Some airline might try "free ticket if you pay for a bag" style setups at some point, if they're daring enough to risk its being closed as a response.

> The implied purpose of taxing airline tickets is to collect taxes on flights.

Sure, but the people who wrote the law specifically excluded baggage fees along with (looks at law) about a dozen other charges that airline levy.

So how can one argue that it wasn't the intent of the law if it's written plainly in the law?

It's not like the law says "this tax applies to baggage", then airlines created a new definition of baggage and then claimed their fee isn't taxable.

It seems like you use "loophole" as a synonym for "things I don't like but are permitted".

> So how can one argue that it wasn't the intent of the law if it's written plainly in the law?

Again, in this case, that exception seems highly likely to have been crafted to permit a practice common at the time, not a practice that became common 40 years later. You pointed that gap out; you can't have it both ways.

Bills being passed that don't reflect legislative intent is hardly unheard of: https://www.motherjones.com/politics/2022/07/minnesota-legal...

"Here’s something you don’t see every day: On Friday, THC-infused edibles and beverages became legal in the great state of Minnesota, after a law containing the legalization measure was included in a health and human services funding bill. How did this measure get through? Critically, a key Republican state senator who co-chaired the committee that passed it didn’t read the text closely enough."

Or when TN almost accidentally legalized child marriage: https://www.wkrn.com/news/tennessee-politics/a-get-out-of-ja...

> It seems like you use "loophole" as a synonym for "things I don't like but are permitted".

Yes, that's precisely the definition of one. https://en.wikipedia.org/wiki/Loophole "In a loophole, a law addressing a certain issue exists, but can be legally circumvented due to a technical defect in the law, such as a situation where the details are under-specified."

Related: On my last flight there were so many carry-on bags they ran out of room. They forced the people boarding last to check their carry-on bags. What some people consider a "carry-on" is debatable. The enforcement of carry-on sizing limits seems spotty at best.

This happened on the last 4-5 flights for me, at least. If flying with family, can be a nice "optimization" to pack into carry-ons and check them all in for free, when offered (sometimes when checking into the flight, sometimes at the gate). Interestingly, I had one such full flight where the overhead bins clearly ended up with a ton of free space so perhaps others went with the same strategy.

> They forced the people boarding last to check their carry-on bags.

For free, I hope?

What they describe has happened to me many times. It's always a free gate-check.

Sometimes the bags are unloaded at the gate, sometimes you have to go to baggage claim.

That happens every flight.

> On my last flight there were so many carry-on bags they ran out of room.

Not just your last flight, it is now intentional and it happens on just about every flight. They even stopped pretending and now they announce that if you're in the last few boarding groups the space will run out before you get there.

It's just another money grab to get people to pay for earlier boarding to have a chance to keep their stuff.

Back 20-30 years ago this never happened, there was always room for carryons.

20-30 years ago they didn't charge extra for checked bags so more people did that instead of dealing with the carry-on hassle.

What I like about airlines charging separately for checked bags is that it means people like myself who don't check bags at all[1] don't have to pay for something we aren't using.

[1] I ship my luggage ahead to my destination through a parcel carrier service. It's a habit I started a long time ago to ensure that my luggage will get to where I'm going in good condition. It also lets me skip one of the things that makes flying unpleasant. Additionally, post-9/11, it brings the benefit of not having to put up with the TSA pawing through it.

Southwest Airlines still does not charge a bag fee.

And I don't typically fly Southwest because it's more expensive for me, because I never check a bag.

Would be interested to see a formula more like dimensional weight used by shippers: some combination of weight (including passenger), volume, and number of units.

I just wear a coat with insanely large pockets. Good luck charging for that!

This isn't it at all. It always comes down to people wanting the lowest fare possible for their flight and the bean counters realized it was possible to pull it off by charging for it.

Because what are you gonna do, drive from NYC to LA? What, and see what the people on the lower tip of Manhattan hath wrought the entire way there? C'mon.

What an I going to do, take a train.

I can get power and a stable internet connection on a train, so I can really work while traveling. Plus no worries about bags, tiny seats, pieces flying off the plane and people dribbling on you.

I use to fly regularity many years ago, now, never again. I told my manager over 10 years ago, I will never fly again, so allow me to drive or take a train on company time, or I will not go :)

No other way of travel is a bad as flying. 30 years ago it was rather good, now it is 1 or 2 steps away from torture.

If it arrives on time. Amtrak seems to be hit-or-miss outside of the Northeast Corridor.

Which brings us back to "what they have wrought".

The US tax code.

Focusing solely on taxes misses the point that most people do not fully utilize "included" baggage allowances on domestic trips, and that is pure profit.

Let's assume a $40 bag fee: $25 cost to handle the bag, $3 tax, $12 profit.

If people pay for the bags separately, in addition to their $220 ticket, they will only pay for utilized bags, so for 1 bag, the profit will be $12.

If the $300 ticket bundle includes 2 allowed bags, but people only check 1 bag, then the profit is: $80 - 2$6 (tax) - 1$25 (cost) = $49 profit, more than 4 times bigger!

The real reason is the comparison sites as the HN commenters pointed out, but the result is not always bad, because the savings is real in many cases as people indeed would only pay for one bag on average ($220+$40 = $260) instead of $300.

I think airlines are much less happy with the separated fees than consumers, but once one airline does it, the others are forced to do it. The same happened with the international trips, which clearly has no tax reason. Many years ago it included 2 pieces of 70-pound bags, then 2 50-pound bags, then 1 50-pound bag, and now in many cases, on basic tickets, nothing at all.

My city requires these $2 stickers per can of garbage. On the surface some people complain, but it’s a way to encourage people to produce less.

I have no idea what the per-bag fee should be, but it seems like a great way to get people thinking about what they actually need to bring and not socializing the cost of those who decide to bring a lot.

Another example is that in many places, the ban on plastic bags wasn't a ban on plastic bags, it was a ban on free plastic bags.

Just charging a couple cents per bag makes people reconsider it, even when they're buying $100 worth of groceries and alcohol.

In the US people use the same amount of plastic is being used and most are not shy to pay a few cents for per bag except for the same minority who are conscientious and bring their onw reusable bags. Imo the cost of comfort is too cheap. If bags costed $1 people would start to bring their own reusable bags in larger numbers.

It’s fundamentally a regressive tax. Increasing it would just exacerbate this inequality.

I guess this is just another way that Americans are just very different from the rest of the world hah

I've seen a recent documentary about Lausanne (Swiss) I think where people were ticketed 150 euro for throwing household trash into the public bins (though it wasn't clear how it was determined it was household trash). It seemed excessive but I understand how this could teach people quickly to do the right thing. And yes, the household bags had to have stickers or a special bag that cost around 2 euro.

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