Airline baggage fees and flight delays: A floor wax and dessert topping?

Abstract

We examine the linkages between the implementation of baggage fees and late flights in the airline industry. We find that baggage fees policies result in improvements in on-time performance as assessed through late flights, directly through improvements in airport-side sorting and loading efficiencies, and indirectly through lower air travel demand. We further find that these relationships are contingent upon the presence of a hub airport on a route. Our findings have important managerial and public policy implications as baggage fees have often been cited as a driver of security queue, aircraft alley, and overhead bin congestions, and ultimately delayed flights. Our results suggest that these suppositions could be misplaced.