Does charging fees for checked bags end up improving airline departure delay performance?

What is it about?

When airlines started charging for checking the first two checked bags, customers reacted in one of three ways: they simply paid the fees and did not change their behavior, they traveled with less luggage, or they carried on more bags so they did not have to pay the fee. Most of us have observed the "above the cabin" impact of this policy change, where airline passengers struggle to find limited space for their extra carry on luggage. This appears to delay the boarding process and could, in theory, result in more delayed flights. What we don't see is the "below the cabin" effect, where fewer checked bags make it easier for airline employees to load and unload the checked-bag cargo. Thus, one response helps improve the airlines' departure performance while the other makes it worse. In this paper, we empirically investigate what actually happened to airline departure delay performance after the checked bag fees were implemented.

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Why is it important?

Airlines are constantly looking for ways to both raise their revenues and improve their customer service metrics, such as the on-time performance of their flights. Our findings show that the change in policies to begin charging for checked bags may have achieved both of these goals.