Price competition among the major U.S. airlines is about to heat up with Wednesday's announcement that Delta will jack up costs concerning passenger baggage. The new fees, effective immediately, boosted one checked piece of luggage from $25 to $30. Passengers with a second checked baggage item will be charged $40, a $5 price hike. However, those with Elite and Delta credit cards will not be affected by the increases.
The 20 percent increase matches the new fees United Airlines put in place at the beginning of September, after Jet Blue, Air Canada and Westjet boosted its costs. So far, there has been no announcement about other competitors like American will also jack up its baggage fees. SouthWest Airlines declared earlier this month that it won't even impose a charge on luggage.
If American also decides to ape the actions of United and Delta, it would certainly take advantage of a secondary revenue stream that would improve the financial pictures of all involved. Baggage costs resulted in total revenues of $4.6 billion to the airline industry in 2017, according to the U.S. Department of Transportation. The Department also lumped in all other ancillary costs like on-board food and other services, stating that those increments made the industry richer by $59 billion.
In the case of Delta, scuttlebutt in the airline market has it that the company delayed imposing its increases when Hurricane Florence was threatening to hammer the east coast of the U.S. Very likely, the news wouldn't have gone over very well with passengers frustrated over having to contend with altered flight traffic due to the storm.
A boost in fuel prices has been blamed for Delta and United's move, which is already attracting attention in Congress. After United boosted its baggage fees, Senators Ed Markey and Richard Blumenthal, in particular, reflected concerns whether passengers drawn by low fares were being cheated by a plethora of fees including those affecting luggage. They argued that those increments could be large enough to make a plane trip much more expensive once those costs are added up.
Some insiders claim that with the revenue up for grabs if such incentives are in place, it may only be a matter of time before the rest of the airline market opt for more baggage charges.