American Airline's new fee: $15 for first bag
David R. Baker, Chronicle Staff Writer
Thursday, May 22, 2008
A word of advice for airline passengers: Travel light. Or else.
American Airlines announced Wednesday that it will charge most passengers $15 for the first piece of luggage they check.
Other airlines may soon follow suit, quite possibly marking the end of free bag checking that most passengers have known for their entire lives. Many carriers - including American - decided earlier this year to charge $25 for the second bag that customers check.
The reason? Oil.
This decade's stunning surge in crude oil prices has hit airlines hard. Each airline burns massive amounts of jet fuel, which is made from oil. And jet fuel's price has nearly doubled in the last year. If prices don't fall, American will spend $3 billion more on fuel this year than it did in 2007.
Airlines have hiked their fares in response, but not enough to cover the full increase in fuel costs. So they're slapping fees on services that travelers once took for granted, such as schlepping bags.
"The bottom line is that our revenues, which include ticket sales and fees, must keep pace with our increasing costs," said Gerard Arpey, chief executive officer of American's parent company, AMR Corp.
The airlines are also taking far more drastic steps, such as eliminating routes and laying off workers.
American announced Wednesday that it would cut its overall domestic capacity - the number of seats available and miles flown within the United States - by 11 to 12 percent by this year's fourth quarter. The airline will retire 40 to 45 of its larger jets and 35 to 40 regional aircraft. The number of workers who will lose their jobs still hasn't been determined, according to the company.
American's first-bag fee won't apply to everyone. Most international travelers will be exempt, as will some of American's frequent fliers and anyone who bought a full-price ticket in economy, business or first class.
While American is the first airline to charge for the first checked bag, others may do the same.
"It's something we are seriously considering as part of the work we're doing to try to find new ways to generate revenue in this kind of environment," said United Airlines spokeswoman Robin Urbanski.
United recently raised the fee for changing tickets, a service that used to cost $100 and now costs $150. Several airlines charge fees for fliers who want more leg room or prefer to sit in an exit row. And most now charge for meals - something that used to be covered in the price of a ticket.
"It's a really sad state when you can check your bag for free on Greyhound and not on an airline," said Henry Harteveldt, a travel industry analyst with Forrester Research.
He said the new baggage fees could cause serious headaches for travelers and airport personnel. Fliers may try to avoid the fees by bringing more carry-on luggage, including the shaving kits that they currently stow in checked bags. That could cause delays in security lines if the travelers haven't removed all the fluids and gels now forbidden in the air, Harteveldt said. The boarding process for each plane could slow to a crawl as passengers jam more suitcases into the overhead compartments.
"This will lead to operational chaos at the airport," he said.
American Airlines represents about 10 percent of operations at San Francisco International Airport, where United Airlines is dominant with half the flights. It is premature to say whether the airport will be affected by the service cuts announced Wednesday, but American spokesman Tim Smith noted that the company has what he called "good-size nonhub operations in San Francisco and San Jose."
Earlier this month, citing the high cost of fuel, American said it will pull out of Oakland International Airport in September after six decades of operating there. The airline has been running three daily nonstop flights from Oakland to Dallas-Fort Worth and has been operating out of Oakland since 1947.
Smith said he anticipates that the airline's schedule will be reduced by eliminating one or more flights at a high-frequency airport as well as altogether leaving some markets.
Oil prices fly past $130 for the first time, closing at $133.17 per barrel.
David R. Baker, Chronicle Staff Writer
Thursday, May 22, 2008
A word of advice for airline passengers: Travel light. Or else.
American Airlines announced Wednesday that it will charge most passengers $15 for the first piece of luggage they check.
Other airlines may soon follow suit, quite possibly marking the end of free bag checking that most passengers have known for their entire lives. Many carriers - including American - decided earlier this year to charge $25 for the second bag that customers check.
The reason? Oil.
This decade's stunning surge in crude oil prices has hit airlines hard. Each airline burns massive amounts of jet fuel, which is made from oil. And jet fuel's price has nearly doubled in the last year. If prices don't fall, American will spend $3 billion more on fuel this year than it did in 2007.
Airlines have hiked their fares in response, but not enough to cover the full increase in fuel costs. So they're slapping fees on services that travelers once took for granted, such as schlepping bags.
"The bottom line is that our revenues, which include ticket sales and fees, must keep pace with our increasing costs," said Gerard Arpey, chief executive officer of American's parent company, AMR Corp.
The airlines are also taking far more drastic steps, such as eliminating routes and laying off workers.
American announced Wednesday that it would cut its overall domestic capacity - the number of seats available and miles flown within the United States - by 11 to 12 percent by this year's fourth quarter. The airline will retire 40 to 45 of its larger jets and 35 to 40 regional aircraft. The number of workers who will lose their jobs still hasn't been determined, according to the company.
American's first-bag fee won't apply to everyone. Most international travelers will be exempt, as will some of American's frequent fliers and anyone who bought a full-price ticket in economy, business or first class.
While American is the first airline to charge for the first checked bag, others may do the same.
"It's something we are seriously considering as part of the work we're doing to try to find new ways to generate revenue in this kind of environment," said United Airlines spokeswoman Robin Urbanski.
United recently raised the fee for changing tickets, a service that used to cost $100 and now costs $150. Several airlines charge fees for fliers who want more leg room or prefer to sit in an exit row. And most now charge for meals - something that used to be covered in the price of a ticket.
"It's a really sad state when you can check your bag for free on Greyhound and not on an airline," said Henry Harteveldt, a travel industry analyst with Forrester Research.
He said the new baggage fees could cause serious headaches for travelers and airport personnel. Fliers may try to avoid the fees by bringing more carry-on luggage, including the shaving kits that they currently stow in checked bags. That could cause delays in security lines if the travelers haven't removed all the fluids and gels now forbidden in the air, Harteveldt said. The boarding process for each plane could slow to a crawl as passengers jam more suitcases into the overhead compartments.
"This will lead to operational chaos at the airport," he said.
American Airlines represents about 10 percent of operations at San Francisco International Airport, where United Airlines is dominant with half the flights. It is premature to say whether the airport will be affected by the service cuts announced Wednesday, but American spokesman Tim Smith noted that the company has what he called "good-size nonhub operations in San Francisco and San Jose."
Earlier this month, citing the high cost of fuel, American said it will pull out of Oakland International Airport in September after six decades of operating there. The airline has been running three daily nonstop flights from Oakland to Dallas-Fort Worth and has been operating out of Oakland since 1947.
Smith said he anticipates that the airline's schedule will be reduced by eliminating one or more flights at a high-frequency airport as well as altogether leaving some markets.
Oil prices fly past $130 for the first time, closing at $133.17 per barrel.
