Jetstar’s divisive new fee could be the tip of the iceberg as airlines start charging for services that used to be free
A travel expert is warning that Jetstar’s new overhead baggage fees are likely just the start of Australian airlines charging customers for services that used to be included in their travel fare.
Today, Jetstar announced it will start charging travellers an additional fee for overhead baggage storage from February 2, 2027.
Want guaranteed space in the overhead compartment? You’ll have to pay for it. iStock
Airfares will still include under-seat storage for items “such as a backpack, handbag, or laptop bag”, but anything bigger will require a paid overhead spot.
Passengers will have to pre-purchase one of a limited number of Priority Carry-on spots starting at $25 one-way, with prices varying depending on the flight.
The airline will also scrap its 7kg overhead baggage limit for a more generous 10kg limit, and overhead items will no longer be weighed at the gate.
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The idea, according to Jetstar, is to speed up the check-in and boarding process by removing the need to weigh and check carry-on luggage.
Adele Eliseo, travel commentator and founder of The Champagne Mile, said this move makes sense for a low-cost carrier like Jetstar.
“Travellers who book with Jetstar tend to be more price-sensitive and more accepting of paying separately for optional extras if it keeps the headline fare down,” she told nine.com.au.
“Commercially, this move creates another opportunity for Jetstar to grow revenue from a service that passengers previously received as part of the ticket price.”
Airlines desperate to increase revenue
Many airlines are looking to increase revenue in the face of rising fuel prices.
Just this week, The Australian Financial Review reported that Qantas is considering offshoring up to 1000 jobs to India as part of an AI deal with consulting giant Accenture to save costs.
That news was met with criticism, much like what Jetstar is copping now.
Some customers have called the budget airline’s new fees “daylight robbery” but Eliseo predicts Aussies will eventually come to accept it.
“Internationally, we’ve seen that while these types of baggage fees are often unpopular at first, consumers eventually adapt to these sorts of pricing changes, particularly if headline fare pricing remains competitive,” she said.
Jetstar passengers may be frustrated with the added fee now, but experts predict they’ll adapt to it. Louise Kennerley
Graham ‘Skroo’ Turner, managing director of Flight Centre Australia, told Today that plenty of overseas low-cost carriers already charge overhead baggage fees.
But Australian domestic airlines don’t offer the same incredibly low-cost fares as international operators like Ryanair.
“We don’t quite have the low airfares that you might expect,” Turner said.
Lack of competition in Australia
The duopoly market structure of Australia’s domestic airline industry limits competition and makes it easier for The Qantas Group and Virgin Australia to increase fares and introduce new fees without risking losing customers en masse.
If Jetstar customers don’t want to pay the new overhead baggage fees, their only other options are Qantas, which is much more expensive, or Virgin, which may not offer the same flights at comparable prices.
Some travellers will simply have to cop the extra charge or fly without baggage.
Flying without baggage may be the only option for some travellers unwilling to fork out for an overhead spot. iStock
Though Eliseo doesn’t expect Qantas or Virgin will follow Jetstar’s lead and introduce new overhead baggage fees any time soon, she warned that airlines will continue to find new ways to increase revenue – and travellers will pay the price.
“We’ve already seen airlines monetise seat selection, extra legroom and fare bundles,” she said.
“Over the next few years, we can expect airlines to continue to identify more services that were once included in the airfare and repositioning them as optional extras that customers will need to pay for.”
Many travel experts agree Australia would benefit from more competition, but other budget operators that have tried (like Bonza and REX) have gone under.
Peter Kelly, a former Qantas exec, is now looking to raise $200 million to launch bargain carrier Zinc and base it at the new Western Sydney International Airport.
Pitched as the Aussie dupe of ultra-low cost European travel giant Ryanair, it’s unclear how successful Zinc will be, if it ever gets off the ground.
International budget airline VietJet Air is also planning to launch in Australia and take on local duopoly, if approved by the Civil Aviation Safety Authority.
International airlines forced to scrap sneaky fees
While Australian airlines are introducing new fees, overseas operators are being forced to scrap questionable charges.
European airlines were banned from slugging travellers with sneaky carry-on baggage fees just last month.
The European Council and the European Parliament agreed passengers will be allowed to bring a free personal item (40cm x 30cm x 15cm) and a small wheeled bag with a maximum weight limit of 7kg on flights.
Airlines will also need to show fares with hand baggage included from the outset, with the rules expected to come into force next year.
Ryanair is known for offering ultra-low fares, then charging for everything from seat selection, to baggage and food. iStock
Budget airline Ryanair was forced to scrap “unfair” fees for parents to sit with their children in June, following an investigation into the charge.
The airline previously charged a ‘mandatory family seat’ fee – usually around £8 ($15) each way – despite Ryanair’s own terms and conditions stating a parent must sit with their child if aged between two years and 11.
The UK’s Competition and Markets Authority (CMA) investigated whether the fee was “unfair” under consumer law, prompting Ryanair to “reluctantly” remove it.
