Why Airline Passengers Wear Fishing Vests

If you want to avoid a baggage fee, try a fly-fishing vest. Asked by WSJ’s reporters, travelers tell how to stuff the vest’s big and small pockets with swimsuits, pants, shoes, toothbrushes, underwear, a laptop, and snacks.

Wearing a fishing vest, we are displaying our demand elasticity.

Airline Economics

Fees and Fares

In addition to paying for larger, heavier, or extra baggage, you might have paid for boarding priority. Then, gone during Covid, change fees appear to be back. You also could have paid a “technology development charge” when you booked online.  One shocker that airlines reputedly are considering is the online check-in.

Meanwhile, Nerdwallet tells us that airline fares are actually slightly down after hitting a high during May 2022:

Costs

As economists, we should keep mind the airlines’ supply side. Looking at their fixed costs, predictably, we include the aircraft itself that might have been purchased or leased. Basic maintenance, insurance, and the technology for booking reservation are also expenses. Then, on the variable side, we have staff and fuel.

Using FAA data, one website summarized average per hour costs:

Our Bottom Line: Elasticity

When airlines calculate fees, fares, and costs, they could be pondering our elasticity. Rather similar to a rubber band, the quantity we demand will stretch or contract based on price. Consumers with considerable price sensitivity are displaying more elasticity. For them, the lower the price, the more likely they buy a ticket. But then, to offset the lower revenue, fees can kick in.

You can see why elasticity returns us to baggage fees and also, to fishing vests.

My sources and more: Today’s post is the result of yesterday’s WSJ fishing vest article . From there, Nerdwallet’s pricetracker and fee summary came in handy as did this article on airline costs. And finally, for why fees are rising, the The Seattle Times had a good summary.