Why do airlines charge for everything?

Why do airlines charge those fees? For starters, having an initial lower headline price makes air travel look cheaper, Keyes said. Airfares are taxed differently than fees. Plane tickets – and anything the ticket includes – are subject to a 7.5% excise tax, Keyes said, but that tax excludes optional fees.



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It's also now a marketing play because add-ons have become a way for airlines to get people to enroll in loyalty programs and credit cards. It also turns out most customers prefer fees since they feel like they get more value and have more choice.

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The story of the airline fee starts with baggage For decades, it was free on major airlines to check at least one bag (some discount airlines got a head start on charging). But in 2008, amid rising fuel prices and economic turmoil, that started to charge.

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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. At some level it doesn't matter what pricing mechanism is used, as long as there is one.

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A plane that flies half empty has many fixed costs like the aircraft itself, employees, IT systems, and airport facility fees. Reductions in variable costs like fuel are not enough to ensure the flight remains profitable, so it is imperative that the airline sell as many seats as possible.

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However, it is now becoming more common for full service airlines to charge for reservations. For low-cost carriers, the lack of an allocated seat is often justified due to the low initial fare. By charging a premium for choice, these carriers can keep unallocated seats at a reasonable ticket price.

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In fact, most regular airlines now charge for seat selection anyways. It's often around $10-$30 per seat per flight segment, so if you cave in and pay for that, it can add up quickly. You shouldn't do it. No matter which airline you're flying on, don't ever pay to select a seat.

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The cheapest days to depart if you're flying within the U.S. are midweek — generally Tuesday or Wednesday. For economy tickets, Tuesdays are about 24% lower than peak prices on Sundays, which translates to savings of about $85 per ticket. The same is generally true for business class and first class travelers.

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This probably depends on where you're going, how long you'll be gone and what kind of trip it is. If you have more to pack than will fit in a carry-on, you'll need to check your bags with the airline.

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One important thing to remember when flying is that airline baggage fees are charged both ways. So, if your outbound flight charges you $30 for your first standard checked bag, expect to pay another $30 for that same bag on your return flight back home (that's $60 bucks, roundtrip).

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You can bring one carry-on bag and one personal item for free on most domestic and international flights. But there are a few rules you'll need to follow.

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With the Southwest baggage rules, your first two checked bags are free as long as they fit within the allowed weight and size limits. Specifically, each checked bag should weigh 50 pounds or less and be 62 inches in size (the sum of the bag's length, width and height) or smaller.

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Low-Cost Airlines in the US: The Cheapest and Best Airlines to Fly Domestic
  1. Southwest Airlines. Southwest Airlines is one of the largest budget carriers in the world. ...
  2. JetBlue. ...
  3. Spirit. ...
  4. Breeze Airways. ...
  5. Hawaiian Airlines. ...
  6. Avelo Airlines. ...
  7. Delta Air Lines. ...
  8. Alaska Airlines.


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