How much does it cost your airline to fly your luggage?
Apparently, the cost of transporting a piece of luggage is … $15. At least that’s according to research done by The Wall Street Journal. The kicker? The second and third piece of luggage costs exactly the same.
Excess and oversize baggage fees are enormously profitable for airlines.
So what goes into transporting a piece of luggage? Airlines say that, on average, at least 10 people touch your luggage from the time you drop it off at the check-in counter to when you pick it up at your destination.
Once your bag is tagged, it gets sorted, placed on a cart and gets transported to planeside where workers unload it and place it on the luggage compartment in the belly of the plane. Once the plane reaches a destination, it gets more labor-intensive because ramp workers must separate the bags that go to the carousel from the ones that are going to a connecting flight.
Baggage handlers must also move cargo, direct planes in and out of gates, and other duties in relation to preparing a flight. Additionally, they have to be trained in handling hazardous materials. Besides paying for salaries, benefits, and training, airlines must also pay for on-the-job injuries relating to moving baggage.
US Airways chief executive Doug Parker said earlier this year that “[his] airline spends $250 million on labor just to handle baggage. That was about 11 percent of the airline’s payroll last year, and works out to something close to $9 per bag.”
In addition to labor expenses, airlines say they spend millions of dollars annually on baggage equipment, facilities and sorting systems, paying rent to airports for bag rooms, carousels and offices and buying carts, tractors and conveyors. They also pay to deliver lost bags to customers and pay claims for items never found. Airline executives suggest that boils down to about one-third to half as much as the labor cost; figure another $4 roughly per bag.
Then there’s the fuel cost to fly the bag. One rough formula sometimes used in the airline business to approximate fuel costs is that it requires 3 percent to 5 percent of the weight of an object in fuel to fly it one hour. That means at current fuel prices, it would cost about $1 to $2 to fly a 40-pound bag on an average three-hour trip.
The baggage fee has resulted in fewer bags being checked and improved baggage-handling reliability and less lost luggage. This creates more room for cargo on planes, which generate more revenue for the airline. The minimum charge for a small package at many airlines is $80 for same-day service.
Of course airline passengers still wonder why luggage isn’t part of the service when you get a ticket. Delta chief executive Richard Anderson said that they weren’t getting any benefit from not charging a fee, so why not charge it?
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