At the beginning of the week JetBlue increased checked bag fees to $30 for first bag. At the time I suggested that the larger US airlines were certainly looking at it, but that a major airline especially Delta needed to do it before we could say everyone would.
United turns out to be the large US airline to go first. For North America, Caribbean and Central America itineraries purchased from today onward:
- $30 first checked bag
- $40 second checked bag within the U.S., Puerto Rico, Virgin Islands, Caribbean and Central America
- $50 second checked bag on Canada itineraries
- $55 second checked bag on Mexico itineraries (no change)
This news comes out on a Friday afternoon before Labor Day weekend. Perhaps that is Josh Earnest’s influence. The airline offered the following statement,
As we continue to make investments that make travel on United better, we are making adjustments to our checked bag fees in select markets – most of which have not been changed for the past eight years. These changes allow us to continue investing in the overall customer experience in today’s marketplace. Customers with MileagePlus Premier status and customers who purchase their ticket with an eligible MileagePlus credit card will continue to receive complimentary checked luggage.
The idea that checked bag fees haven’t gone up in years is a bit beside the point, you’d expect large successful companies to drive down costs and the marginal cost of bag handling is fairly low once the infrastructure for handling bags is in place.
Though I didn’t have a prediction of which US carrier among Delta, United, and American would go first it shouldn’t surprise that it would be United, currently led by a man who never met a fee he didn’t like (including for water). United’s move of course makes it more rather than less likely that others will follow. American in particular will have real explaining to Wall Street analysts to do on its next earnings call if they do not match this increase.
If you’re unhappy with higher checked bag fees bear in mind that they are encouraged by the tax code. The 7% excise tax on domestic airfares doesn’t apply to these fees, so if nothing else United should see a tax savings from moving some revenue out of fares and into fees for domestic flights. So to some extent blame your politicians, not United.
And remember that if you’re an elite frequent flyer with the airline or have the airline’s co-brand credit card you don’t pay first checked bag fees. This creates more of a sense of lock-in, with travel on your usual carrier cheaper (with no checked bag fees) than on another airline even when ticket price is the same. Of course carriers do status match.
United can of course charge what they wish for their product. To the extent the rest of the industry follows it will highlight how homogenized incumbent carriers have become and underscore the need for new business models in the industry to differentiate products, something US carriers vociferously lobby against.