Summer Travelers Should Pack Light or Pay the Cost

(Bloomberg Opinion) -- After despairing about the cost of my summer vacation, I was recently celebrating finding seemingly reasonably priced fares to Croatia. My moment was cut short by the catch: a checked 23-kilogram (51-pound) bag on the EasyJet Plc flight would cost almost 60 euros ($64.50) per passenger per flight.

It was an unpleasant introduction to the wonders of dynamic pricing of ancillaries — industry jargon for varying costs for extras like bags and assigned seats depending on the route, flight and the time of the booking (as opposed to just applying a fixed charge).

“Our hold bag prices are demand driven to match the demand we see from consumers, and this is also one way we’re able to keep fares low,” an EasyJet spokesperson told me. But I’m not on board with a practice that makes it harder to compare offers and feels like a way to sting families who are reluctant to restart their flight search.

While this isn’t a new trend — low-cost rival Ryanair Plc began charging extra for peak-season luggage more than a decade ago — surge pricing for luggage is becoming more widespread. JetBlue Airways Corp. joined the fray last month, announcing bag fees that fluctuate by season.

Aviation was one of the first industries to recognize the potential of this tactic, but initially it was confined to tickets: We’ve all since learned to book early and fly in the shoulder season to get a low price; or else book late and depart during the school holidays and get fleeced.

The history of modern aviation is of new charges for things that used to be free and these extras becoming an important source of revenue for airlines. Ancillaries contribute almost half of Wizz Air Holdings Plc’s sales, for example, and the Hungarian budget carrier prices many of these extras according to demand, much like tickets.

“Optional add-ons are not required to fly, and we believe that customers should be offered the choice and flexibility to choose the right products for them,” a Wizz spokesperson said.

When Ryanair began charging for checking luggage in 2006 – when the cost was a modest £2.50 ($3.10) per bag, compared to up to £60 now — it hoped passengers would only travel with a small wheelie case, allowing it to use the savings from lower handling costs and fewer check-in counters to cut fares.

Inevitably, finding room in cabin overhead storage began to feel like the Hunger Games, threatening the speedy turnarounds that low-cost airlines depend on. Hence, many airlines have begun charging for carry-ons too, with an exception for bags small enough to fit under the seat.

To be clear, I’m in in favor of passengers only having to pay for the flight services they need – one-third of EasyJet customers travel only with an underseat bag (though I struggle to imagine this being sufficient for a two-week beach vacation).  

There are also sensible arguments for variable charges for bags: Additional weight consumes more fuel, which in turn produces more planet-heating pollution, so it makes sense to charge more for flying long-distances. 

But charging more for bags in busy periods can’t always be justified by scarcity — many budget carriers don’t carry cargo in the belly of the aircraft, though in some cases they are subject to other weight restrictions. And these days, customers often tag and drop bags off themselves.

I’m not alone in worrying all this complexity risks confusing consumers. “Airlines should compete with one another to secure passengers’ business — not to see who can charge the most in surprise fees,” US Transportation Secretary Pete Buttigieg said last month as the Biden administration announced new measures to enhance transparency of ancillary fees. These protections include a requirement for airlines to tell customers upfront what fees they charge for checked bags and to remind passengers that paying extra to select a seat is optional.

Perhaps we consumers only have ourselves to blame: The DoT was told that only 1.3% of those searching Google Flights use a feature to integrate bag fees into the display results. 

Meanwhile, Spirit Airlines Inc. said fewer than 1% of customers who abandoned a booking midway through the process had done so because baggage fees were not displayed at the start.

The UK government decided in January to leave optional airlines fees out of its crackdown on so-called drip-pricing. EasyJet's management told investors in November that existing legislation already protects consumers on this side of the Atlantic and a spokesperson for the airline told me the costs of any added extras are clearly displayed during the booking process. 

I still think there’s scope for some airlines to differentiate themselves by not determining all their fees via algorithm and forcing customers to try to game the system.

Southwest Airlines Co. still allows passengers to check in two bags for free, for example, and when I booked a British Airways flight recently, I was reminded of their comparatively generous two-item free cabin-bag allowance. (Mind you, the ticket certainly wasn’t cheap.)

The boom in ancillary fees shows airlines previously underestimated their customers’ willingness to pay more and doubtless we’ll get used to this latest microaggression too. But it risks sowing distrust in a supply-constrained market; customers might pick another airline next time, or simply stay home.

More From Bloomberg Opinion:

• Thinking About Flying? The Price Is Only Going Up: Thomas Black

• ‘Drip Pricing' Is Turning Checkout Into a Nasty Surprise: Alexis Leondis 

• Wendy's Would Have Crossed a Line by Testing Surge Pricing: Bobby Ghosh

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Chris Bryant is a Bloomberg Opinion columnist covering industrial companies in Europe. Previously, he was a reporter for the Financial Times.

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