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Tired Of Paying For Checked Baggage? You're Actually Getting A Good Deal

Jan 21, 2015
Originally published on February 19, 2015 6:36 pm
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Now - the economics of checking your bag. Most airlines these days charge you to do that. JetBlue, one of the last holdouts, recently caved and it's not hard to see why. The fees bring a billion dollars a year to airlines. It might feel like another annoying charge on top of an already pricey plane ticket, but Planet Money's Stacey Vanek Smith says if you look at it another way, you might actually be getting a deal.

STACEY VANEK SMITH, BYLINE: So, let's just get this out of the way - everybody hates baggage fees. But what you don't realize when you're sitting in the cabin is that there's intense competition for space in the belly of the plane. There are only so many pounds a plane can carry, so your 40-pound bag means the airline can take 40 pounds less in cargo.

What kinds of things are in the cargo space of an airline?

MARISA GARCIA: Practically everything that you can imagine.

SMITH: Marisa Garcia writes about airlines.

GARCIA: Things that are going to end up in our stores - electronics, there are clothes, livestock.

SMITH: Livestock? Like, they ship cows in cargo?

GARCIA: I don't know about cows but I do know that they ship sheep. There's a lot of shipping of sheep between New Zealand and Australia and the continents.

SMITH: That's right - your hair dryer, hiking boots and balled-up sweaters are competing for space with sheep. Or, if your plane is headed to New York City, a whole lot of shellfish.

SANDY INGBER: This is our oyster bar. We have Island Creek, this is from Massachusetts. These are Shigoku from Washington state.

SMITH: Sandy Ingber is the executive chef at the Grand Central Oyster Bar in Manhattan.

INGBER: We're the largest seafood restaurant in New York City. Not the fanciest but definitely the freshest.

SMITH: Every day a thousand oysters fly here from all over the world to be shucked and iced and slurped down with mignonette sauce.

Where's the farthest that you've ever flown an oyster from?

INGBER: Tasmania.

SMITH: No way.

INGBER: Yeah. (Eating an oyster). Amazing.

SMITH: Your suitcase is competing with Ingber's oysters. If you pack too much, his bivalves get bumped.

INGBER: People go first. Freight goes last, even fresh food.

SMITH: Is that like, if people check too many bags then there's not room?

INGBER: Yeah.

SMITH: Ingber pays about a nickel per oyster to put his freight on your flight. On average, it works out to about a dollar a pound for cargo - a dollar a pound for cargo. So take a look at your luggage and do the math. The average checked bag is 35 pounds. Most baggage fees are $25. So if you're just going by cargo prices, most travelers are getting a deal. You could argue that we should be paying more to check our bags.

BILL COY: No, I wouldn't want to.

SMITH: Bill Coy is on his way to Washington, D.C. with a suitcase he has to check.

Do you know how much your bag weighs?

COY: I have no idea. I'm going to guess this one's about 30 pounds.

SMITH: Do you mind if we weigh it?

I brought a scale.

Let's see. There we go. So it's about 38 pounds.

Would Coy pay $38 to check his bag?

COY: You have to change clothes and that sort of thing, you know. If I didn't have to, I wouldn't.

SMITH: Now, there is an argument that Bill Coy did just spend a couple hundred dollars on a plane ticket. Couldn't that make up for the 13 pounds he's not paying for? Our airline expert Marisa Garcia says it's not that simple. Airlines have a very slim profit margin and people, like Bill, sitting in a seat costs a lot of money. They need flight attendants and safety videos and soft drinks.

GARCIA: You sell the ticket. The average profit margin for that ticket is $6.

SMITH: Six dollars. Whereas cargo doesn't demand free pretzels - much higher profit margin.

So why do they carry people at all?

GARCIA: Airlines are meant to carry passengers and they get benefit out of carrying passengers. For one thing, they get to exist.

SMITH: Even with the tiny profit margin, airlines always have the hope that they can get passengers to spend more - more cocktails, more in-flight movies and, when they dream them up, more fees.

Stacey Vanek Smith, NPR News, New York. Transcript provided by NPR, Copyright NPR.