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Focusing solely on taxes misses the point that most people do not fully utilize "included" baggage allowances on domestic trips, and that is pure profit. Let's assume a $40 bag fee: $25 cost to handle the bag, $3 tax, $12 profit. If people pay for the bags separately, in addition to their $220 ticket, they will only pay for utilized bags, so for 1 bag, the profit will be $12. If the $300 ticket bundle includes 2 allowed bags, but people only check 1 bag, then the profit is: $80 - 2$6 (tax) - 1$25 (cost) = $49 profit, more than 4 times bigger! The real reason is the comparison sites as the HN commenters pointed out, but the result is not always bad, because the savings is real in many cases as people indeed would only pay for one bag on average ($220+$40 = $260) instead of $300. I think airlines are much less happy with the separated fees than consumers, but once one airline does it, the others are forced to do it. The same happened with the international trips, which clearly has no tax reason. Many years ago it included 2 pieces of 70-pound bags, then 2 50-pound bags, then 1 50-pound bag, and now in many cases, on basic tickets, nothing at all. |