Skift Take

Airline executives often say they don't know why consumers hate their industry so much. Bag fees are among the reasons.

United Airlines is the latest North American airline to increase checked bag fees, announcing Friday it is charging $30 for the first bag and $40 for the second on most flights in North America, the Caribbean and Central America.

A United spokeswoman said the change is immediate, though only in effect for tickets purchased Friday or later.

“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,” the United spokeswoman said. “These changes allow us to continue investing in the overall customer experience in today’s marketplace.”

United is the first of the three largest U.S. carriers with bag fees to match JetBlue Airways, which on Monday raised its fee for the first checked bag to $30. Two Canadian Airlines — WestJet Airlines and Air Canada — also increased bag fees in August. 

The industry often moves together on pricing, so it’s possible other North American airlines will join soon. But federal competition law bars carriers from discussing future pricing decisions, so travelers will not know whether another major U.S. airline plans to copy United and JetBlue until it does. An American Airlines spokeswoman said, “we are unable to discuss future pricing.” A Delta Air Lines spokesman declined to comment.

Airlines are increasing fees as fuel prices remain considerably higher than at the same time last year. Crude oil was trading at about $70 in New York on Friday, about $20 more than a year ago. The new higher prices appear here to stay, airline executives have said. 

Airlines can also recover some of that difference via higher fares, but historically they have found the market cannot absorb a major fare increase at once. Executives often say it takes as long as a year for average fares to catch up to higher oil prices.

United may also use increased bag fees as leverage as its seeks more customers to sign up for its co-branded credit cards. The cards are highly profitable for airlines, and United is making a push to get more customers to apply, with flight attendants soon to be required to hawk them onboard. Customers who have United-branded cards are exempt from the fee for the first checked bag.


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Tags: ancillary revenue, bag fees, credit cards, jetblue airways, united airlines

Photo credit: United Airlines is the first among the major three global U.S. carriers to raise its bag fees to match JetBlue. Pictured are United customers checking bags. United Airlines

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