Key Highlights

  • Jetstar will replace its 7kg cabin-baggage limit with a size-based model from 2 February 2027.
  • Every passenger will retain one free underseat bag, while overhead-locker access will become a paid option.
  • Priority Carry-on pricing starts from AUD 25 one way on selected routes and includes priority boarding.
  • Jetstar Domestic earnings rose 38% in 1H26 and delivered a 22% operating margin.

Qantas Airways Limited (ASX:QAN) is changing how Jetstar passengers use cabin baggage. From February 2027, the airline will remove its long-standing 7kg carry-on limit and stop routine gate weighing, while turning overhead-locker access into a paid product.

The model may improve boarding and add ancillary revenue, but its reception will depend on transparent pricing and consistent enforcement. The change arrives as Jetstar contributes high margins to the Qantas Group.

Company Overview

Qantas operates domestic and international airline services through the Qantas and Jetstar brands. Jetstar is the group’s low-cost carrier and relies on unbundled fares, paid extras and efficient aircraft utilisation.

For the six months ended December 2025, Qantas reported underlying profit before tax of AUD 1.46bn, up 5%. Jetstar Domestic earnings rose 38% at a 22% operating margin, while Jetstar International earnings increased 9% at a 14% margin.

How the Baggage Model Will Change

From 2 February 2027, each passenger will receive one free underseat bag measuring up to 40 x 30 x 20 centimetres with no weight limit. Infants will receive an additional underseat allowance.

Customers wanting overhead space may purchase Priority Carry-on, covering a bag up to 56 x 36 x 23 centimetres and priority boarding. Pricing starts at AUD 25 one way on selected routes and varies by route and demand. Jetstar asks that overhead bags remain below 10kg for safe lifting.

The Operational and Revenue Rationale

Removing routine weighing may reduce confrontations and speed up gate processes. Limiting overhead access may also reduce the time passengers spend searching for locker space, supporting quicker aircraft turnarounds.

Priority Carry-on adds another ancillary product while preserving a low base fare for passengers travelling with only an underseat bag. Jetstar has not disclosed an expected revenue contribution.

Customer Response Remains Important

Charging for locker access may be viewed as an additional fee, particularly if prices rise on busy routes. Bag-size checks could recreate gate disputes if enforcement is inconsistent. Clear disclosure at booking and predictable treatment at airports will shape customer acceptance.

What Investors May Watch Next

Qantas’s FY26 result, Jetstar margins, ancillary revenue, on-time performance and customer complaints may indicate whether the policy improves efficiency without creating material reputational costs.

Risks

  • Customers may respond negatively to paid overhead-locker access.
  • Inconsistent bag-size enforcement could create delays and complaints.
  • Regulators may examine whether fees are disclosed clearly during booking.
  • Ancillary revenue may not offset implementation or reputational costs.
  • Airline earnings remain exposed to fuel prices, demand and operating disruptions.