But it's not just about unbundling and charging customers more. A key driver in domestic checked baggage fees is tax arbitrage. Airlines want to get a portion of the transportation cost out from under the base airfare so that it is not subject to the government's 7.5% excise tax on tickets.

The shift toward "unbundled" pricing began in 2008 when American Airlines introduced the first domestic checked bag fee to offset skyrocketing fuel costs. Since then, it has evolved into a massive ancillary revenue stream that generated over $33 billion globally in recent years. By removing bag costs from the base fare, airlines can display lower "ticket prices" on search engines, staying competitive against low-cost carriers like Spirit or Ryanair. This "a la carte" model allows travelers to pay only for the services they use. Additionally, charging for bags encourages passengers to carry less, which reduces the aircraft's weight, lowers fuel consumption, and speeds up the "turnaround time" at the gate. However, this has led to a "carry-on arms race," with overhead bins frequently reaching capacity as passengers try to avoid the $35-$60 fees that have now become a permanent fixture of the modern aviation business model.