Baggage Fees and Seat Reservation Fees: Are We Ready for a Resurgence of Airline “Extras”? | Travel
IIf you haven’t flown since 2019, you may have forgotten how the simple practice of reserving a seat has become a difficult task, akin to the loop route you have to take in the shops of the airport to reach the departure lounge. You just want to buy a flight; airlines want to sell you a flight that includes a reserved seat, baggage allowance, an in-flight snack, a hotel room at destination, travel insurance, car rental and a blanket. And this year, as the industry seeks to replenish its empty coffers, selling is going to be tougher than ever.
Like supermarkets, airlines are a high-volume, low-margin business. According to the International Air Transport Association, in the five years to 2019, the average the net profit per passenger among its members was around £6. Alarm bells started ringing when that figure fell to £4.32 in 2019, but not as sharply as in 2020 when Covid turned profit into a loss of around £55 per passenger.
Today, as the industry moves towards recovery, ancillary revenue generated from what was previously included in ticket prices is a fundamental part of the bottom line. In 2019, the last full year of operation before the pandemic, the average cost of a Ryanair seat was around £31; the cost per passenger – including salaries, airport and handling charges, maintenance and other expenses – was £24. Every little amount to increase that razor-thin margin helps — especially low-cost carriers. For easyJet, £1.37bn was generated from ancillary charges in 2019, representing 21% of its revenue, while Wizz Air raked in £793m from extras, around 41% of its revenue .
Ryanair introduced priority boarding in 2008
Ryanair increased its ancillary revenue from £3m in 1999 to £2bn in 2019. It did this by making aviation profitable, starting with a £2.50 checked baggage fee in 2006 In 2007 it announced a £2 check-in fee, and a year later it gave the world priority boarding queue, earning an extra £4 per booking. With each new charge, we collectively swore we would never fly the Irish carrier again, but by 2011 most other airlines were copying it.
Selling tickets online has made the process easier, and in the US alone, revenue from baggage fees has increased sevenfold, from £350m in 2007 to £2.5bn in 2013 – when British Airways coyly announced it was ‘expanding choice for short-haul flights’. customers with the launch of a new hand baggage-only fare”.
Props aren’t just there for the bad things in life, like having to pay to sit with your family or taking a suitcase on vacation. Revenue also comes from commissions on hotel bookings, car rental, travel insurance, and all the other deals you need to go through before you get to the payment page.
You may not notice that the one-way fare that initially caught your eye is almost always lower than the return fare. Of 52 routes on the same date offered by easyJet, Ryanair, Vueling and Wizz Air, 39 had prices for outbound flights lower than those for return flights, often significantly. For example, Wizz Air’s base fare for its 10.15pm flight from London Gatwick to Mykonos on June 5 is £12.99; a return on June 12 is £70.99 – the air fare charged on the outward flight, payable by the airline, is £13, just a penny more than the fare.
After choosing your flights and fare type, it’s time to select your seats. Many budget airlines publish their fares, but so-called legacy carriers such as British Airways (BA) and Air France are not as forthcoming, simply stating that “prices vary depending on seat type and cabin in which you are traveling. in”.
That’s an understatement. Economy class exit seats on return Heathrow-Barbados flights with BA, departing May 31, cost £180 on top of the £899 airfare; 39E – in the middle of the back row and probably the one you’d get if you didn’t book a seat – costs £52 more. Such pricing results in a beef class hierarchy in which those in the front of the economy cabin enjoy faster service and more choice, while those in the back may find that the only meal option remaining is the one no one else wanted.
Some holidaymakers may feel like they have to pay for seats to ensure their family members are seated together, and this is largely due to what appears to be the opacity of some carriers. Although BA makes it clear that “we always do our best to sit your family together”, it’s much harder to find such promises on the websites of others, including Air France, American and Iberia; rather than waiting to be connected to a helpline that is “experienced at an extremely high call volume right now”, many parents are paying for peace of mind. It’s no small sum either – a colleague paid an extra £184 to seat an adult with two children under 12 on a four-leg round trip with Air France from London to Johannesburg (via Paris and Amsterdam). Would it be difficult for airlines to state their family seating policy in advance so that passengers could potentially avoid these fees?
Baggage fees are another income (see below). In what looks like an attempt to soften the blow, most carriers have bundled what they’ve unbundled and are offering fares that include seat selection and baggage allowance, but a little easy research suggests that this isn’t the case. may not be such a smart choice. We looked at three flights each from easyJet, Ryanair, Vueling and Wizz Air, all departing on the same date in June. In 10 of the 12 cases, selecting the most basic fare – without seat selection or checked baggage – and then adding them when finalizing the booking proved to be cheaper than selecting the bundled fare on departure. It wasn’t a big difference (between £5 and £10 pp) but worth checking it out next time – it might at least save you enough to pay for that onboard snack you used to to get free.
Seat selection is profitable for airlines
Extras in numbers
Seat selection (min-max)
*Valid from March 2022. Prices vary depending on seat position and how far in advance you reserve it
easyJet 99p – £12.99
Wizz Air £4-£28
20-23kg registered box
*Valid from March 2022. Prices vary depending on load factor and flight duration
Wizz Air £7.50-£79
Proportion of total industry revenue
Baggage fees 60 percent
Accelerated security, priority boarding, in-flight Wi-Fi 19 percent
Assigned seats 12 percent
Food and duty-free 9 percent
*Source: IdeaWorks Company, 2019
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