The Absurdity of U.S. Air Travel: Baggage Fees Revisited

Catching up on President’s day weekend.

This appeared earlier without comment.  My bad.  I had intended to comment on it a bit.  I don’t quite buy the logic in the piece.

He suggests that lack free accommodation of bags imposes costs on flyer and makes money for the airline.  Price theory 101 would suggest no.

If indeed for example:  ‘ To double the airlines’ profits, the social benefit of which is highly unclear…We spend time and effort schlepping luggage through the airport’; then does a new entrant stand to profit?  If the costs enumerated to passengers are less than the cost to the airline of providing bag service, then why doesn’t an airline offer the bag service at a lower fee more approaching the costs of providing it and below the cost to passengers of avoiding it?  Passengers would flood to this offer wouldn’t they?  The new service would be profitable.

Gains from exchange would be realized.

There are some property rights issue that might complicate this picture I think.  Another consequence of bag fees is:  ‘ we jostle for the few spots in packed overhead bins.’  The overhead bins are still un-priced!  This would suggest that they are not allocated to those who value them most, they may be overused as well (think stuff falling on your head, or things broken due to the bins being overfilled.

Perhaps the problem isn’t the pricing of checked bags, but the lack of pricing for space for unchecked bags!  That might encourage more parsimony in choosing what to take on trips to the benefit of all.

In the end though, maybe I’m not the one to comment as I don’t like flying.

The Absurdity of U.S. Air Travel: Baggage Fees
Sanjoy Mahajan
Wed, 09 Jan 2013 14:34:27 GMT

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