US airlines increase baggage fees

Recent bag check fee increases by Delta Air Lines and Continental Airlines could prompt rivals to follow as the US airline industry struggles to claw its way out of the 2009 economic downturn.

Sales of ancillary goods and services by airlines enable them to earn more money while keeping fares competitive. The strategy has paid off for US carriers that have struggled for survival amid high fuel prices, low-fare competition and recession.

Southwest Airlines has been a notable exception to this trend. The company has said it has benefited from its "bags fly free" marketing campaign.

"I believe the airlines will match, but because Southwest has yet to implement one, checked baggage fees will have a lower cap than they would otherwise have," Morningstar analyst Basili Alukos said.

Continental now charges customers US$25 (A$27.16) for the first bag and US$35 for a second piece of luggage for flights to and from the United States, Canada and the Virgin Islands. The carrier raised its fees on January 8.

"We matched Delta's bag fee increase on January 8," company spokeswoman Mary Clark said.

Delta now charges US$23 for the first bag and US$32 for the second item.

"We have not changed our checked bag charges at this time," said Tim Smith, spokesman for American Airlines. "We continue to study and monitor the marketplace as to the initiatives of Delta and Continental."

Representatives for United Airlines and US Airways also said the carriers were studying the changes.

Reuters

Comments