American Airlines bumps up baggage fees
A much-hated airline fee is starting to creep up again.
A much-hated airline fee is starting to creep up again.
American Airlines will now charge US$40 (AU$61) to check a bag at the airport for domestic flights or $35 for those who pay in advance online. Previously, the airline charged US $30 (AU$45) for the first checked bag. A second bag will now cost $45, up from $40.
Airlines are once again tapping luggage fees as a way to offset rising costs, in some cases for the first time in more than five years. American’s price increase follows similar bumps at other airlines. Alaska Airlines raised the charge by $5 early this year to US$35 (AUD$53) for a first checked bag and $45 (AUD$68) for a second. JetBlue Airways this month started charging $45 (AUD$68) to check a bag at the airport, with a US$10 discount for paying in advance.
Scott Chandler, American’s senior vice president of revenue management and loyalty, said Tuesday that the fee increase was driven by inflation as airlines have been battling rising costs for fuel and labour.
“Fuel is a big component — obviously the more bags we carry, the more fuel you’re burning,” he said in an interview. “The cost of handling bags across the board, from real estate, machinery, et cetera, has gone up. This is trying to match that,” he said.
On American Airlines flights between the U.S. and Canada and Mexico, a first bag will cost US$35 (AUD$53) and a second will cost US$45 (AUD$68) regardless of whether they are purchased at the airport or in advance.
Airlines have done away with some pesky charges, such as flight-change fees. But other charges for things such as better seats have proliferated, and airlines often rely on fees to offset rising costs.
While airline ticket prices have been volatile in recent years, surging in 2022 and then easing off last year, luggage fees have been relatively stable. American and other airlines last raised bag fees in 2018 — to US $30 (AU$45) for a first bag and US$40 (AU$61) for a second. JetBlue and United Airlines in 2020 raised the fees for checking bags at the airport by US$5 but allowed passengers to avoid the increase by paying in advance.
JetBlue, which has been losing money and is looking to boost revenue, has been most aggressive in raising bag fees. Now, a customer who doesn’t pay ahead of time can spend over $US100 (AUD$150) checking two bags.
JetBlue said it boosted bag fees most recently to battle rising costs of wages, fuel and other inflationary pressures while keeping base fares low and avoiding charges for popular services such as Wi-Fi.
“While we don’t like increasing fees, it’s one step we are taking to get our company back to profitability and cover the increased costs of transporting bags,” a JetBlue spokesman said. Alaska also said it is navigating rising costs.
Charging for luggage started as a page in the budget airline playbook over 15 years ago. But most bigger airlines, which once included bags in the price of a ticket, quickly embraced the idea as they sought to tap in to new sources of revenue and offset expenses. Those fees have stuck around even as costs have ebbed and flowed.
In 2022, U.S. airlines brought in nearly $7 billion from checked-bag fees, 17% more than in 2019, before the Covid-19 pandemic. Last year’s figure was on track to outpace that, with nearly US$5.5 billion in revenue from checked-bag fees in the first three quarters of the year.
Ultra discounters often charge even heftier luggage fees, which can vary based on the route and timing of purchase. Southwest Airlines has stuck to its policy of allowing two free checked bags.
The rising fees can also help steer travellers into airline loyalty programs or toward pricier premium tickets that still include baggage fees. At American, for example, customers with the airline’s co-branded credit card or who have status will still receive complimentary bags, as will those who buy seats in premium cabins.
JetBlue and Alaska also offer free checked bags for certain flyers with elite status and for co-branded cardholders.
Travellers have reacted by trying to cram more luggage into overhead bins, which some experts say can complicate boarding and slow the process down.
Chandler said less than half of American’s customers check bags, and most don’t pay for them. One reason: The airline has been adding bigger bins to its planes that can accommodate more carry-ons.
The carrier on Tuesday also said it is lowering fees for some over-size items that are just a few pounds heavier or a few inches larger than standard bags. Previously, items anywhere between 50 and 70 pounds could be subject to a US$100 to US$200 (AUD$150-300) fee, often setting off panicked scenes at check-in counters. Starting in April, items that come in up to 3 pounds overweight will only cost an additional US $30 (AU$45).
American has been trying to drive more customers to its website, where bookings tend to be more profitable for the airline. It said Tuesday that starting in May, customers will only earn miles and loyalty points when they book directly with American, unless they are under a corporate contract or booking using a preferred travel agency.
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