Airfare must go up with or without free luggage

Prohibiting the collection of the fee for checking in baggage will not hold back the increase in the price of air tickets and the sector expects to face a scenario of instability for the next four months due to high operating costs.

According to Abear (Brazilian Association of Airlines), the value of the ticket is strongly impacted by the dollar, which continues to increase the price of items such as aircraft fuel, aircraft maintenance and leasing. From January to May, the rise in kerosene reached 48.7%, according to Petrobras data compiled by the association. Last year, the cumulative increase was 92%.

This Thursday (5th), senators indicated to the government and companies that will approve the project to allow passengers to check luggage weighing up to 23 kg on domestic flights and up to 30 kg on international flights at no extra charge. If approved, the measure will be sanctioned or vetoed by President Jair Bolsonaro.

As the proposal is not yet valid in practice, companies and industry representatives do not inform their estimates of impact on prices.

According to Anac (National Civil Aviation Agency), in January of this year, the average price of tickets in the domestic market was R$ 478.34, 20% higher than that recorded in the same period in 2021. IBGE data ( Brazilian Institute of Geography and Statistics) indicate the movement of the current escalation.

In the IPCA-15 (National Consumer Price Index – Extended 15), airline tickets rose 9.43% in April, after a 7.5% decline in March. The rise was driven by the value of kerosene.

“The concept of free dispatch is wrong. What is being discussed is whether the luggage will be paid for only by those who use it, which is what has happened since 2017, or if it goes back to the 20th century model, in which the price of the luggage of 90 passengers is shared by all”, says Eduardo Sanovicz, president of Abear.

The charge for checking baggage was separated from the value of the ticket in 2017 by Anac and is again under discussion in Congress. According to Anac’s resolution, if the company wants to, it can charge a value for the transport of the passenger and another for the transport of the luggage.

Migrating the pricing model to the same model as the international one was one of the measures to expose the Brazilian market to international competition, defends the sector. According to the president of Abear, only Cuba and North Korea do not charge separately for luggage, the value is included in the ticket price.

When it came into force, the measure was well received by airlines, which are free to price their tickets according to market fluctuations. They predicted a drop in ticket prices.

The market even registered a reduction in prices in 2017, but it did not hold and there is no way to say precisely whether the drop was due to the change in baggage policy or the recession.

Sanovicz says the expectation of lowering prices with separate luggage was based on the fall in the exchange rate between 2002 and 2016, which allowed airlines to reduce the value of tickets by half.

“[Há dez anos,] the average ticket was R$900 and, in 2016, it was around R$410. In 2002, we sold 30 million tickets, in 2016, 104 million tickets. We halved the price, and the number of passengers tripled,” says Sanovicz.

“But since 2017, the exchange rate has risen 60% and aviation kerosene, which is dollarized, has risen 209%. Around 50% of the cost of Brazilian aviation is dollarized. The country’s economic scenario has changed, not improved , and it was aggravated in the last year. In 2022 alone, in four months, kerosene rose 48.7%. There is no way to avoid the transfer to the final price of the ticket of this brutal increase in costs that the companies are experiencing, “says the businessman .

Under current rules, passengers can carry one hand luggage up to 10 kg, without paying additional fees, on trips to national destinations. Above that, you need to check and pay a fee that varies depending on the weight of the bag and the airline.

In March, more than 6.4 million people traveled by plane on commercial flights across the country, according to data from Anac released this Tuesday (3).

It was the 12th consecutive increase in this indicator. The regulatory agency says it was an increase of almost 100% compared to last year. But when compared to the numbers recorded in March 2019, in the pre-pandemic period, the index is 16.8% lower.

Another factor that should contribute to future ticket price increases is the need to adopt measures in favor of the environment, according to Barry ter Voert, director of Air France-KLM for Europe, to the Portuguese newspaper Eco.

He says that the pressure on airlines for more sustainable and pro-environment measures will increase the cost of the operation, which will naturally be passed on to the consumer.

Sustainable aviation fuel (SAF) would be the biggest player in this scenario, as its production and distribution costs are still four times more expensive than ordinary kerosene.

The executive says, however, that the increase in tickets due to the SAF will not be sudden, but will be felt gradually by consumers, as there is still not enough sustainable fuel for the entire industry.

collaborated aeroin

Check the average domestic rate over the last 10 years

Source: Anac (National Civil Aviation Agency)​