Throughout 2008, the rise in oil prices was a major contributor to increased ticket prices.  This lead several airlines to impose a $25 fee to check a second bag on domestic flights.  In May, American Airlines became the first major carrier to impose a $15 fee on the first piece of checked luggage, with many other airlines quickly following suit. Airlines also increased fees for larger and heavier bags, as well as for people with more than two bags.

Today, most major airlines charge $15 each way to check one bag; $25 each way for a second bag; and as much as $125 each way for a third bag (or any bag that weighs more than 50 pounds). Even though oil prices have dropped, airlines are keeping the baggage fees in order to make more of a profit from "a la carte" pricing - passengers pay for the services they use, whether it's checking an extra bag or buying a sandwich on board the aircraft.

According to the airlines, moving passenger baggage is an very labor intensive, requiring many workers. On average, each bag gets touched by about 10 workers during its journey.  Once the bags are tagged, they are sorted and placed on carts, then driven out to the plane, where a crew loads them into the aircraft. Unloading the bags also requires man-power.  The bags are sorted into luggage to be delivered to the bag claim and luggage that needs to be routed to connecting flights.  Those going to connecting flights have to be sorted and driven to several different planes.

According to US Airways Chief Executive Douglas Parker, his airline spends $250 million a year on labor just to handle baggage. That was about 11 percent of the airline's payroll, and works out to around $9 per bag.  In addition to labor expenses, airlines spend about one-third to half as much as the labor costs to buy baggage equipment, sorting systems, carts, tractors and conveyors.  That adds another $4 roughly per bag to the cost.  Then to figure out the fuel it costs to fly the one bag, there is a formula that requires 3 percent to 5 percent of the weight of an object in fuel to fly it one hour. That means it would cost roughly $1-$2 to fly a 40-pound bag on a three-hour trip.  If you add those guestimates in price up, it equals out to around $15 per bag.  This is the cost that many airlines have set to charge the customers.

Airlines report that they have noticed a change in behavior of many passengers.  Many more customers are choosing noe to check multiple bags, or any bags at all, instead opting to store everything in their carry-on. The reduction in luggage has made noticible improvements in baggage-handling reliability, lowered the rate of lost luggage, and created more room for cargo on planes. Cargo rates are considerably more lucrative for airlines than passenger baggage.