With several airlines in the last year raising the cost of checking a bag, while also cracking down on which fares have one included, many are increasingly turning to checked baggage costs for a separate income stream.
One recent estimate found that the world's 20 biggest airlines generated over $33 billion in profit from checked baggage fees alone. That is 4.1% of total airline revenue at a time when some are struggling to make up for losses created by the rising cost of fuel, Boeing (BA) deliveries and increased competition.
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Another strategy is to catch traveler attention with an initially low fare and then make up for it with a steep baggage fee for anyone who needs more than a small carry-on or, in some cases, purse or backpack when they travel.
What's in this new ultra basic fare? Boarding last and no points or carry-on bag
The standard model for low-cost airlines such as Spirit Airlines (SAVE) and Frontier (FRON) , this is now also starting to be seen in some mainstream airlines.
WestJet Airlines, which is Canada's second main airline after flagship carrier Air Canada (ACDVF) , recently announced a new "UltraBasic" fare that includes nothing but a small personal item that can fit underneath one's plane seat.
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Other restrictions included in what the airline bills as its "lowest priced option" and a "no-frills fare" is the inability to collect loyalty points for future travel like with more expensive fares and having to board last for a seat at the back of the plane.
"We are committed to air travel affordability, and UltraBasic is an innovative cost-effective solution that strengthens WestJet's ability to offer guests budget-friendly airfares to more destinations," WestJet Group EVP and CCO John Weatherill said in a statement. "With UltraBasic, guests can tailor a travel experience that meets their needs, without paying for additional services they don't value. We are delivering on our low-fare promise and believe UltraBasic will give more Canadians the opportunity to fly."
Those who want to check a bag will need to pay the airline's rate starting at $45 Canadian dollars (approximately $32 USD) for flights within North America when booked ahead of time and $55 CAD ($40 USD) when purchased at the gate. While WestJet is calling the new UltraBasic fare a "commitment to air travel affordability," the fares can still run steep.
Here is why WestJet's new UltraBasic fare could spell bad news for flying affordability
A cross-country return trip from Montreal to Vancouver this summer currently shows as $750 CAD (approximately $547 USD) with the UltraBasic Fare on WestJet's website.
WestJet also wrote that guests who purchase a flight with the low fare but then bring a carry-on suitcase anyway will be charged both a "checked bag fee and a service fee to check the bag under the aircraft."
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As warned by some, such a model when it comes to baggage could increasingly seep into other airlines.
“Airlines are raising bag fees in part because of higher labor costs, and in part because they want to — and they can," Henry Harteveldt, who heads travel industry firm Atmosphere Research Group, recently said to CNN. "Passengers don't like paying to check bags, but they generally don’t change airlines over the price of the checked bag fee.”
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