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San Francisco Chronicle
The research firm IdeaWorks estimated recently that airlines worldwide bring in annual baggage fee revenues totaling $33.3 billion and noted that Southwest is the sole outlier among major U.S. carriers in not charging them. Federal statistics show that in 2023, baggage revenue was $1.3 billion for American, $1.2 billion for United, and $985 million for Delta.
Mastercard
In late 2023, travel industry firms CarTrawler and The IdeaWorks Company projected that airline ancillary revenue would increase to $117.9 billion worldwide for 2023. That would represent a 275% increase over ancillary revenues in 2013, which were $31.5 billion. While ancillaries are growing overall, ancillaries per passenger ticked down in 2023 significantly. In 2024 and beyond, airlines will focus on maximizing ancillaries per person. Although other factors such as increases in average ticket price can influence customer behavior, it’s important to keep a special focus on ancillaries.
Crain’s Chicago Business
Traditionally, advertising hasn’t been much of a focus for airlines, says Jay Sorensen, president of IdeaWorks, a consulting from outside Milwaukee that tracks ancillary revenue. “Every once in a while, I’ll come across a carrier making a big push on this,” he says. “They tend to come and go. It’s not an easy thing. They’ve got to be really dedicated to have it work. I haven’t seen airlines do it well for a sustained period.”
CBS News
Jay Sorensen, president of IdeaWorks, a consultancy that has advised U.S. airlines, agrees that drip pricing makes comparing airline ticket prices more complicated. But he still thinks it can benefit consumers by letting them pay for the extras they want, while leaving behind those that aren’t important to them. “The outcome is of course that it’s more difficult to compare between different products and airlines,” he said. “While that’s true, airlines, as profit-seeking companies, are under no obligation to make it easier to compare with their competitors.” Sorensen compared the experience of booking airfare today to shopping for groceries. “You roll in with your shopping cart, and as you walk through the aisles you toss stuff in your cart,” he said. “You buy a base fare, and as you go through the booking path you add things to the cart, like a checked bag, seat assignment, or pay to book a meal or other services,” he said. “That’s dramatically different from the way travel was once sold in U.S.”
Wall Street Journal
The lowest-priced reward flight with American on average was 25% cheaper in 2024 compared with five years earlier, according to airline-consulting firm IdeaWorks. Comparatively, the price of a rewards flight, in miles or points, across all of the carriers studied rose 28% on average since 2019. The IdeaWorks analysis was based on 600 flight inquiries conducted in March for travel between June and October. The queries searched for the lowest-price fares for certain routes across six carriers: American, United Airlines, Delta, Southwest Airlines, JetBlue and Alaska Airlines.
The Street
If you recently tried to book a flight with points or frequent-flyer miles, you might have noticed that not only cash prices have jumped significantly. The “they want how much for that flight?” feeling is confirmed by data — IdeaWorksCompany, a consulting firm analyzing airline revenue, calculated that the average price of a plane ticket purchased with miles rose by 28% between 2019 and 2024, or 7% more than the 21% inflation of the U.S. Consumer Price Index during the same time period. “Mileage/point prices have climbed 28% overall since the last survey five years ago,” write the study’s authors. “[…] The primary reason is the larger flow of miles/points from co-branded credit card accrual, which created more demand and prompted airlines to increase reward prices.”
USA Today
Airline reward tickets are getting more expensive. While cash fares for flights are rising slower than inflation, a new report from IdeaWorksCompany, a consultancy focusing on ancillary airline revenue, shows that reward redemptions are getting even pricier than paid-for tickets. According to the analysis, airline reward ticket prices have increased 28% on average in the last five years, while the Consumer Price Index rose 21% over that same period. The survey was based on 600 fare queries at six different U.S. airlines.
South China Morning Post
Airlines made US$33 billion from baggage fees worldwide last year, and they could make even more this year. Last year’s estimate is up almost 15 per cent from 2022, and it’s the first time it’s crossed US$30 billion since before the pandemic. Carriers could be set to make even more this year, as several US airlines have upped their checked bag fees. Baggage fees alone were worth an estimated US$33.3 billion to airlines last year. That’s according to a report from IdeaWorksCompany, a consultancy for airline ancillary revenues, and car rental firm CarTrawler.
Skift
Another reason airlines are increasing bag fees may be to boost sign ups for their loyalty programs and co-branded credit cards. For example, United said travelers that own a United Chase credit card or are members of its MileagePlus program will still be able to check in a bag for free. American said AAdvantage status members and credit card holders can also check in their first bag for free. Jay Sorensen, the president of airline consulting firm IdeaWorksCompany, said bag fee waivers was one of the primary benefits of holding a co-branded credit card. “If you make bag fees more expensive, you are making the credit card more valuable to hold,” he said. “I think that a good portion of all of the headlines regarding American increasing their bag fees can also be seen as a promotion for taking the co-branded credit card.”
Business Insider
Baggage fees alone were worth an estimated $33.3 billion to airlines last year. That’s according to a report from IdeaWorksCompany, a consultancy for airline ancillary revenues, and car rental firm CarTrawler. IdeaWorks’ report analyzes revenue disclosures from around 120 major airlines around the world, before collating a global estimate.
