Institute of Transportation, MOTC

       In recent years, many airlines have implemented checked baggage fees in US domestic flights since 2008. Besides, to improve airport efficiency and create a smooth baggage transfer process globally, airline alliances have advocated the change of baggage policy from weight-based to piece-based, leading to the diversities of baggage charging schemes of airlines. Nevertheless, limited attention has been paid to travelers’ preferences on different charging schemes and baggage policies operated by airlines.

        Using the stated choices of travelers assessed from survey data, this research investigates travelers’ preferences on the charging scheme of checked baggage. From the results of the multinomial logit model, we find that fare, travel time, free baggage allowance, and baggage fee are significant attributes that may influence travelers' choice of airline. In addition, travelers also prefer traditional legacy carriers, while compensation, priority claim for checked baggage, and weight of carry-on baggage have little influence on travelers' choices.

       The latent class logit model uses age as a categorical variable, revealing that both classes of travelers are sensitive to fares and travel time. Further, the elder group prefers traditional legacy carriers; while the young group prefers LCC and is aversive to baggage fees. Also, it can be more attractive if the alternative attached more allowance for checked bags for young travelers.

       The results of the policy simulation analysis show that alternatives including free baggage check-in is generally better than that excluding, and the price effect on alternatives with higher free baggage allowance is relatively slight. From the results, it can be known that after the change of the checked baggage policy(including policy and allowance), the market share only slightly increases by about 1 to 2%, which means that under the reform of baggage policy, there is no significant change in the market share of airlines.