Airlines increase baggage allowance: worth the weight?

Hot on the heels of Emirates and Qantas Airways, legacy carriers like Singapore Airlines and Garuda Indonesia recently announced a 10-kilogramme extra baggage allowance for passengers across all classes.

While analysts say other carriers might soon be pressured to do the same in order to keep up, at the end of the day, it still comes down to dollars and cents.

Asia Pacific airlines are hoping to hit the sweet spot with more customers by upping the baggage allowance, starting from at least an extra seven kilogrammes in economy class.

Qatar Airways also added an extra seven kilogrammes for its economy class passengers, from 23 to 30 kilogrammes in September 2013. Emirates extended the baggage allowance in 2009 and Etihad Airways upped theirs in 2012.

"It's ironic that many of these legacy carriers that have been picky with passengers for being overweight in terms of their baggage and suddenly, because of the intense competition from low-cost carriers, they're saying ‘here's another 10-kilogramme allowance’. I don't think it will make much of a difference," said Shukor Yusof, an analyst at Standard & Poor’s capital IQ.

"Most people travelling nowadays travel very lightly. They don't need a lot of baggage. But if you're allowing 10 kilogrammes, I think it is negligible. In the whole context of whether it is going to increase your bottom-line, I don't think it will have any impact at all. What will impact is whether or not fuel prices will stay low."

Travellers typically have to pay for checked-in baggage in a low-cost carrier (LCC). But that playing field is changing with the likes of Thai domestic LCCs such as Nok Air and Thai Lion Air that offer free 15-kilogramme baggage limits, effectively competing with the free 20-kilogramme allowance offered by most legacy carriers.

Besides Garuda Indonesia, Singapore Airlines and Malaysia Airlines, China Southern Airlines and Qantas Airways have also increased their baggage allowance for their customers on certain routes.

But analysts say this will not go very far in terms of increasing the airlines' bottom-line. Rather, they say these full serviced carriers should work on enhancing other product offerings to stand out from the competition.

“There are many other ways to compete. In-flight entertainment is one, more comfortable seating is another, greater choice in terms of selection of the type of services that you want and the type that you don't need, and this should result in a lower-price ticket,” said Paul Ng, global head of aviation at Stephenson Harwood.

"For SIA, they already provide the best service in economy in the region; you've got food, drink service, excellent in-flight entertainment,” said Greg Waldron, Asia managing editor at Flight Global.

“Unfortunately a lot of the time when people choose air tickets, they choose to buy on price and that's always going to be a challenge for airlines like this. You can always throw things at the customer but it's always going to come back to people's wallets. "

Baggage and ticket prices aside, experts say it all boils down to the cost of fuel that will ultimately affect the airlines' bottom-line. 

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