A new economics paper proposes letting airline passengers sell their unused checked baggage allowances to other travelers, but the idea faces significant practical and financial obstacles.
The proposal, published in the Review of Economic Design, would create a market where passengers with free checked-bag benefits could transfer rights to those willing to pay. The buyer would check their own bag under their own name through the airline, preventing informal luggage-tagging arrangements.
The core problem: airlines rely on "breakage," the fact that not all passengers use their included benefits. On a typical flight with 100 passengers entitled to one free checked bag each, only about 60 actually check bags. Carriers size their operations around this reduced usage. Making every unused allowance tradable would increase the total number of checked bags per flight, driving up handling costs and fuel consumption.
The paper frames airlines as keeping value passengers should be able to sell, but that mischaracterizes how airline pricing works. A transferable benefit becomes a different, more costly product. Airlines would likely respond by reducing included allowances, raising fares, or eliminating certain flights entirely if the combination of higher fuel bills and lost baggage-fee revenue no longer makes economic sense.
Ryanair offers a more limited solution. It allows passengers on the same booking to pool their checked-baggage allowances. Two passengers each buying 20 kilograms can split that allowance as 15 and 25 kilograms, respecting individual bag weight limits. That approach makes purchased allowances more flexible without forcing airlines to recalculate their entire pricing model.