Southwest Airlines has stuck to its guns, refusing to charge customers fees for checking bags. I’m amused by the subtlety of the dig they take at other air carriers with their “Grab Your Bag. It’s On” campaign.
But are they leaving money on the table, money that passengers have shown they’reÂ willing to pay? In September the airlines reported a 275% growth in revenue from bag fees in the second quarter this year compared to last year. That’s hundreds of millions of dollars more.
But Portfolio.com looked deeper and found that the two major airlines that don’t charge baggage fees — including Southwest — actually performed better revenue-wise than did those that charged fees. Look how they compare to Dallas-Fort Worth’s other big dog:
American Airlines, for example, generated an industry-leading $118.4 million in bag fees during the second quarter, a 219 percent year-over-year jump, says the BTS. Yet its total revenue in the second quarter dropped 20.9 percent to $4.88 billion from $6.17 billion in 2008’s second quarter …
Just as in the first quarter, the only carriers to keep their second-quarter revenue declines in single digits were the two airlines that still permit free checked bags. Southwest was down 8.8 percent
So you tell me: Have passengers “accepted” these fees?