Are checked bag fees for flights too high, too low, or just right?

Air Genius Gary Leff has a take on this, here is the concluding bit:

While checked bag fees are profitable, airlines want passengers to pay lower fares and higher checked bag fees, not price checked bag fees so high that people don’t pay them. That’s because moving revenue out of fares and into ancillary revenue excludes that revenue from the domestic 7.5% excise tax on tickets.

Checked bag fees are in large measure a tax arbitrage play. Eliminate the tax disparity and — since most aircraft don’t max out their carrying capacity — in ten years I’d bet that checked bags get rebundled back into the fare.

Higher checked bag fees may be disadvantageous since charging more for checked bags pushes more luggage to carry on, causing boarding to take longer, and resulting in aircraft not getting scheduled/utilized as effectively.

Do read the whole thing.  Don’t forget — Glazer’s Law!