Delta is latest airline to raise checked bag fees. See how much more you'll pay
Delta Air Lines is raising its checked bag fees as the war in the Middle East disrupts global oil supplies and increases fuel prices.
The carrier is increasing the fees for first and second checked bags to $45, up from $35, on domestic and some short-haul international routes. The biggest hike is on third checked bags, which is going up by $50 to $200.
The new fees, which is the first increase in two years, will take effect for tickets purchased on or after April 8.
“These updates are part of Delta’s ongoing review of pricing across its business and reflect the impact of evolving global conditions and industry dynamics,” the airline said in a statement.
The carrier said some customers would still be able to check their first bag for free, including those traveling in Delta’s first class, premium select and Delta One cabins. Active duty military and customers who hold one of the airline’s co-branded credit cards and loyalty program members who reach certain tiers will also continue to receive their complimentary checked bags. Most customers flying transatlantic routes will also continue to receive their first checked bag free.
Airlines around the world are confronting soaring operating expenses due to jet fuel prices that have jumped more than 85% since the Iran war began on Feb. 28. The conflict has curtailed ship traffic through the Strait of Hormuz, a key passageway for a fifth of the world’s oil. Airspace closures in parts of the Middle East have added to the price pressure by forcing some airlines to take longer routes that burn more fuel.
Delta is the latest airline to raise fees in response. Last week, JetBlue announced it was raising baggage fees by as much as $9 and United Airlines said it was increasing the cost of checked bags by $10.
Jet fuel is one of the airline industry’s biggest expenses, typically accounting for about a quarter of operating costs. The average price for a gallon of jet fuel reached $4.69 on Tuesday, up from $2.50 the day before the conflict broke out, according to Argus’ U.S. Jet Fuel Index. The energy market intelligence company notes jet fuel accounts for up to 40% of an airline’s operating expense.
Earlier this month, the CEOs of Delta, American Airlines and United Airlines reported that higher jet fuel prices had already added about $400 million in operating costs.
Industry analysts expect airlines to continue passing some of their higher fuel costs on to travelers through add-ons, such as checked bags and seat upgrades, instead of adding fuel surcharges to the cost of a ticket.
That’s because of a little known tax loophole that allows U.S. carriers to avoid paying taxes on ancillary fees. Airlines have to pay a 7.5% federal excise transportation tax on base airfare for domestic flights. However, the law specifically excludes baggage and seat selection fees from the tax, as long as “the charge is separable from the payment for the transportation of a person and is shown in the exact amount.”
If an airline were to charge $300 for a round-trip ticket that combined airfare and baggage fees, it would have to pay the government $22.50 in taxes. But if the airline only charges the customer $220 for airfare, and then separately charges a baggage fee of $40 each way, then their tax bill would be $16.50.
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