Airline / Baggage Fees

Further Unbundling of Baggage Fees

United Airlines was the first US airlines to start charging separately for bags checked. Now they are further unbundling this service with a separate fee for bags checked in at airport.

Baggage Fee Unbundling

Baggage Fee Unbundling

There is an additional fee to check in bags at the airport vs. checking them before flight. Once again this is very well executed pricing change with focus on customer reference price. Look at the right upper corner of the image, they are positioning online pre-checkin for bags as a convenience and time saver. The additional fee for airport checkin is not something that is forced on all customers  as most will add bags when they checkin from home/office/hotel.  The additional price is not about the cost since cost is irrelevant to pricing. If there is value to customers in delaying baggage checkin till they reach the airport then they United Airlines must be able to get a fair share of that value.

If there is one thing they could have done differently is to take a cue from Prospect Theory and position this as one price $25 (not $20) and for online checkin offer a $10 discount instead of listing the fee at $15.


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