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Packing up: Baggage fees for major airlines are set to rise

Packing up: Baggage fees for major airlines are set to rise

Bags secured

Bad news just landed if traveling light isn’t exactly your forte: American Airlines, Alaska Airlines, and low-cost carrier JetBlue Airways have all announced that they’re raising baggage fees this year, with others predicted to follow.

The price hikes are landing in the $5-10 zone across a range of both domestic and international flights, with American Airlines explaining that the raises are a result of “inflation, fuel costs, and increased operating costs” in a statement to Newsweek on Wednesday.

Let’s unpack…

In the last 15 years, airlines have increasingly leaned on baggage charges as an opportunity to cash in. Data from the Bureau of Transportation Statistics reveals that US airlines raked in a total ~$6.8 billion in baggage fees in 2022, with 2023 figures tracking even higher over the first 9 months of the year —15 years ago, BTS attributed just $1.1 billion to baggage fees.

Of course, not all airlines lump costly luggage fees onto customers. Southwest and its famously generous 2-bags-free policy, for example, made just $66m in bag revenue for 2022 from more than 157 million passengers. Meanwhile, "lower cost" carriers like Frontier and Spirit made $745m and $933m, respectively, from less than 65 million passengers between them.

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eBay stock slumps on gloomy Q4 outlook despite solid Q3 earnings

Shares of eBay fell as much as 10.5% in premarket trading on Thursday morning after the company gave a lower-than-expected profit forecast for the important holiday shopping season.

The e-commerce giant reported solid numbers for the third quarter on Wednesday, with revenue up 9% as reported to $2.8 billion and gross merchandise volume rising 10% to $20.1 billion, topping the average analyst forecast of $19.4 billion, per Bloomberg.

However, concerns about the future somewhat overshadowed these results.

eBay outlined its profit outlook for the period ending in December to $1.31 to $1.36 a share, with revenue at $2.83 billion to $2.89 billion. According to Bloomberg-compiled data, this broadly matches Wall Street’s estimates for the top line, but misses on the bottom line, with analysts forecasting EPS to come in at $1.39 — suggesting the company expects some further margin pressure.

The company has been facing macroeconomic challenges since the US ended the de minimis tariff exemption in late August, with the online marketplace reliant on shipments. One small silver lining? CFO Peggy Alford highlighted a “less durable trend” on a post-earnings call: that as commodity prices for precious metals boomed, demand for bullion and collectible coins on eBay spiked.

However, concerns about the future somewhat overshadowed these results.

eBay outlined its profit outlook for the period ending in December to $1.31 to $1.36 a share, with revenue at $2.83 billion to $2.89 billion. According to Bloomberg-compiled data, this broadly matches Wall Street’s estimates for the top line, but misses on the bottom line, with analysts forecasting EPS to come in at $1.39 — suggesting the company expects some further margin pressure.

The company has been facing macroeconomic challenges since the US ended the de minimis tariff exemption in late August, with the online marketplace reliant on shipments. One small silver lining? CFO Peggy Alford highlighted a “less durable trend” on a post-earnings call: that as commodity prices for precious metals boomed, demand for bullion and collectible coins on eBay spiked.

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