An aviation expert has warned that Australian airlines could follow the lead of American carrier United Airlines and begin charging for carry-on baggage.
United became the first major airline to make the change when it announced it would begin charging passengers for overhead carry-on bags from 2017 with its new “basic economy” ticket.
The decision reflects the industry trend towards slugging passengers for extras after offering a lower base fare price.
A 2016 study by New Zealand company Idea Works showed carriers have increased profits on extras such as in-flight food, drinks, entertainment and extra legroom by 200 per cent since 2010 – with that figure set to rise in the coming year.
Senior lecturer and discipline leader in aviation at Central Queensland University, Ron Bishop, said competition was driving a race to the bottom that could see other airlines forced to also ramp up charges in an effort to keep up.
“[Carriers] just keep on trying to think of ways to offer cheaper flights,” Mr Bishop told The New Daily.
‘One of the last sacred conveniences’
United is expected to increase profits by $US4 billion in the next three years, with $US1 billion of that coming from its new carry-on policy.
The announcement was unsurprisingly met with resistance and criticism, especially from New York Senator Chuck Schumer, who labelled the move “one of the most restrictive policies on airline passengers in some time”.
“The overhead bin is one of the last sacred conveniences of air travel,” he said in a statement.
“It seems like each year, airlines devise a new, ill-conceived plan to hit consumers and it has simply got to stop.”
Mr Bishop said United and other airlines were simply looking for a way to undercut rivals.
“This is all the result of the low-cost carrier model,” he said.
“This means [United] will be able to lower their prices, which could force others to follow them.
“It’s like when banks raise interest rates – sometimes they’re the only one, and sometimes everyone does it.
“But it will all depend on the consumer – they might say, ‘We’re not having this’.”
A representative for Qantas said the airline had no plans to start charging for carry-on baggage, despite the carrier making $1.55 billion from “ancillary” (extras) profits in 2016 – putting it ninth in the world.
Qantas offshoot Jetstar was another big offender, making 21 per cent of its total profit from extras charges, with Tigerair just behind on 20 per cent.
Tigerair also confirmed it had no plans to charge for carry-on baggage “at this time”.
Extras a huge money-spinner for airlines
An analysis of 178 airlines found the traditional players such as Air New Zealand and United Airlines were profiting the most from add-ons, and that profits were set to rise by another 13.8 per for 2016.
And some airlines are making it harder for passengers to discern between standard fare prices and extras.
Both Jetstar and Air New Zealand received warnings from the New Zealand Commerce Commission in 2016 for misleading customers by automatically “preselecting” optional extras during online purchases.
Airlines claim the extras are a symptom of rising aviation costs, despite fuel prices falling sharply in 2016.
But Mr Bishop said carriers were having to grapple with increased bureaucracy and regulatory costs, plus demand for more sophisticated entertainment systems.