Is Jetstar Following Ryanair's Low-Cost Playbook?

Budget airline introduces new fee for overhead carry-on baggage

Jetstar has announced that passengers will soon have to pay an additional fee to store carry-on luggage in the overhead lockers, marking a significant change to its domestic fare structure. From February 2027, travellers will only be able to bring one small personal item, such as a backpack, handbag or laptop bag, free of charge, while larger carry-on bags placed in overhead compartments will attract a separate fee.

The move aligns Jetstar more closely with several international low-cost airlines that charge separately for optional services beyond the base airfare.

Lower fares, more optional charges

Under the new policy, passengers wanting to use the overhead lockers will pay between $25 and $52 per flight, depending on their booking. Jetstar says the changes provide customers with greater choice by allowing those travelling light to avoid paying for services they do not use.

However, consumer experts argue the approach shifts more of the total travel cost into optional fees rather than reducing the advertised ticket price, making fares appear cheaper at the initial booking stage.

A shift towards the ultra-low-cost model

Industry commentators have compared the new pricing strategy to the model used by European budget carrier Ryanair, where travellers pay separately for services such as baggage, seat selection, and priority boarding. The approach allows airlines to advertise lower base fares while generating additional revenue through optional extras.

The changes also come at a time when domestic airfares across Australia have generally increased, leaving travellers with fewer low-cost alternatives in a highly concentrated airline market.

Travellers may need to rethink packing

The new rules could encourage more passengers to travel with only a small personal item to avoid additional fees. Those requiring larger cabin bags may instead choose to pay for overhead luggage or check baggage before departure, depending on which option offers better value.

As airlines continue reviewing their pricing strategies, ancillary charges are becoming an increasingly important source of revenue alongside ticket sales.

What travellers should watch next

Passengers booking Jetstar flights from February 2027 onwards should carefully review the airline's updated baggage allowances and pricing before travelling. Investors will also be watching whether the new policy boosts ancillary revenue without affecting passenger demand or customer satisfaction.

For now, Jetstar's latest baggage changes reflect a broader trend within the airline industry towards unbundled pricing. While the strategy may help keep headline fares competitive, travellers may increasingly find that the final cost of flying depends on the additional services they choose to include.

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