My guess is that it costs airlines a lot less to handle gate-checked bags than checked luggage. If they could get away with it, they might require everyone to carry all of their bags to the gate. They didn’t, even before the limits on items in carry-on luggage, because checked luggage is a convenience for some passengers–especially if they have connecting flights. The question, then, is whether the value of checking luggage is greater than or equal to the airline’s cost. In that context, it makes sense to charge.

They shouldn’t charge the full cost of baggage handling, because of the congestion costs you identify associated with carry-on luggage. But they probably also shouldn’t charge zero.

Unless you consider behavioral economic responses (e.g., Michael’s indifference to the charge Southwest builds into ticket prices for baggage handling). I wonder if the airlines would have gotten a different response if they had offered a $35 discount for those who fly without luggage (and kept baggage handling costs in their base ticket price). It shouldn’t matter, but…

Of course, Southwest does have another tragedy of the common problem: getting on board early. On occasion, I have done online check-in about 23 hours and 45 minutes in advance of my flight, and still found myself deep in group B.

I’ve watched my mother run this scenario a number of times: She looks for airfare online, finds the absolute cheapest flight going from home to wherever she is going. This is when she calls me to tell me about the smokin’ deal she got on a plane ticket. She books it, then acts surprised when it’s super-substandard service in any number of ways, from paid check baggage, to 1 flight attendant, to the plane only has one wing, or whatever. If the general paying public could remember more often the price *over*-consciousness drives service cuts to assist in competition, flying might still be enjoyable (maybe) and we might be able to buy consumer goods worth their salt (where applicable, as not all consumer goods contain salt).

Southwest lets 1 bag fly free. Because they’re the only airline advertising it, I don’t even check anyone else’s airfare before booking Southwest, so they could be gouging the ever-loving whoa out of me and I would have absolutely no idea. And you know what? I’m okay with that, because I don’t even have to think about it. I was raised with the idea that if it can’t fit into one bag, there’s too much, or you need a bigger bag.