Jetstar will charge passengers $18 to stow carry-on bags in overhead compartments starting February 2027, joining a growing list of budget carriers worldwide that monetize cabin space previously included in base fares. The Australian airline's decision marks the first time a carrier in the region has charged specifically for overhead locker access, according to industry analysts.
Passengers can still bring a purse, laptop bag or small backpack that fits under the seat in front of them at no charge, Jetstar said. The overhead compartment fee starts at 25 Australian dollars, or $18, one way, with pricing varying by route. Bags placed in overhead bins can weigh up to 10 kilograms, or 22 pounds. The airline will eliminate gate-side weighing of carry-on luggage, scrapping the existing 7-kilogram, or 15-pound, limit for items stored under seats.
Market Positioning and Competition
The policy mirrors practices common among low-cost carriers in the United States and Europe, where overhead bin fees have become standard revenue generators. Jetstar cited passenger and staff complaints about gate weighing and locker space shortages as driving factors. "By giving customers an underseat bag with the option to add Priority Carry-on, we can make better use of overhead locker space, streamline boarding and help more flights depart on time," Jetstar CEO Stephanie Tully said in a statement. She added that the move would ensure customers only paid for what they needed.
Sharon Petersen, CEO of AirlineRatings.com, said Jetstar was the first to charge for use of the overhead lockers. She noted the change "will ruffle feathers because Australian travelers have got such high expectations," adding, "For such a long time they lived in a bubble of full-service options only."
Pricing Concerns
Petersen raised questions about Jetstar's competitive positioning relative to European ultra-low-cost carriers that employ similar unbundling strategies. "Jetstar's starting price is generally well above what Ryanair or Wizz Air can offer, largely because Australia lacks that level of competition and because wages, taxes and operating costs sit much higher here," she said.
Australian and New Zealand airlines have already introduced charges for checked luggage, seat selection, and some dining and in-flight entertainment options, following patterns established by carriers worldwide. The overhead locker fee represents another step in the unbundling of air travel services, allowing carriers to advertise lower base fares while generating revenue through add-on purchases.
Tully framed the policy as reducing frustrations at boarding gates, where passengers currently compete for limited overhead space and face weighing requirements that can delay boarding.
Why This Matters:
Jetstar's overhead bin fee illustrates how market segmentation allows carriers to offer lower advertised fares while letting passengers choose which services they value. The à la carte pricing model gives cost-conscious travelers options to minimize spending while enabling those who want convenience to pay for it. However, the policy's success depends on whether base fares drop enough to offset the new charges, or whether airlines simply capture additional revenue without corresponding price reductions. Australia's higher operating costs and limited competition mean passengers may face steeper total costs than travelers in more competitive European markets, even as they gain more control over individual purchase decisions. The elimination of gate weighing could streamline operations and reduce delays, benefiting all passengers regardless of baggage choices.