AAL to charge for 1st checked bag


#1

Just found this news on msnbc.com:
http://www.msnbc.msn.com/id/24756513/

$15 for the first checked bag starting June 15, in addition to cutting back on domestic flights. I can’t say I’m all that surprised.


#2

I think they are going to drop this like a hot potato if none of the other airlines follow suit.


#3

Already sent a useless email to AMR. Pointed out in their Customer Service Plan it specifically mentions convenience as a primary concern and how this goes against this 100%, not just for the cost, but because of the logistics on the aircraft.

Think about it. There is already NOT enough space in the cabin for carry-ons, so the fact that AA is planning on charging for the first bag will have more people getting the largest suitcase they can on the plane as a carry on. They will run out of space, so the luggage is then gate checked, which puts it in the cargo hold, where it would have gone in the first place if AA wouldn’t have been so stupid as to do this.

This is just going to drive away customers, especially those going on vacations. Delta already said they don’t plan on following along (we’ll see how long that lasts). I think it is rediculous. Wonder if AA should have looked into getting more fuel efficient jets a long time ago, as the MD-80s aged. I will say, I think that the airlines, despite what the “experts” say, are starting to use the “cost of fuel” excuse just as frequently as the “weather delay” excuse.


#4

Now this is just absurd. Stop nickel and diming us.


#5

Then ticket prices go up.

I think it’s stupid too. (I’m gonna be flying on them in a while.)


#6

I think they are dumb for charging $25 for the second bag. I think they would make more if they lowered the fee to $10 for the second bag. Now instead of packing 45 lbs. in 2 smaller suitcases you now use 1 big suit case to pack the same 45 lbs. As Pika said people who would not have used up their carry on allowance will now pack a carry on with clothes in it as well, defeating the airlines goal of less weight. I would guess if they lowered the second bag fee more people would take advantage of it and in return they would make more then if they left it at $25. Now to charge for the first bag is totally stupid. I think was a telling sign of what people think about the fee “AMR shares tumbled after the announcement, which came as its shareholders gathered for their annual meeting.”


#7

If you take away the incentive to check baggage there will be room for more profitable belly cargo.

Eastern did this in the 1980’s. They had a midnight departure out of BWI for ORD. The fare was some ridiculously low amount. One stipulation; no checked baggage - carry on only.

The company sold the belly to one of the air frieght companys that did not own enough assets for the route. If memory serves I think it was FEDEX. At the time they were still a a growing company transitioning away from FFJ-20’s. Nothing like they are now.


#8

Gee, next thing you know they will charge rental fees for overhead bin space due to the lack of space from everybody jamming their already oversized bags in the overheads because the people didn’t want to pay fees to check bags.


#9

SHHHHHhhhhhh! Don’t give 'em any ideas!!!
I think there’s a place for you at the top of American’s corporate ladder :wink:


#10

Overhead bins. Come to think of it mail sacks would be a perfect fit!


#11

Travelers furious over American Airlines’ plans to charge $15 fee for one checked bag

By Carol Pucci
Seattle Times travel writer

Hit hard with record-high fuel costs and an aging, gas-guzzling fleet, American Airlines, the nation’s largest carrier, said Wednesday it will begin charging some domestic economy-class passengers $15 each way for the first checked bag.

Last month, American … announced it would join other major carriers (except Southwest) in charging $25 for second bags checked by domestic coach passengers who are not premium members of their frequent-flier programs.

“Frankly, I expect the other Big Six carriers [United, Delta, Continental, US Airways, Northwest] to match American’s move with lightning speed,” Joe Brancatelli said in an e-mail message he sent to subscribers of Joesentme.com, a newsletter he publishes for business travelers. “And, frankly, I expect absolute chaos at ticket counters around the nation.”

He’s not alone in that. Fliers unhappy with American’s move are posting on blogs and other sites around the country, making the same predictions.

Customers such as Brian Jones, 29, a Seattle network engineer who flies five or six times a year, expressed frustration.

Jones said he and a friend each had to pay American Airlines $25 for checking a second bag on the way home from Los Angeles recently after a Mexican cruise.

“They wouldn’t give you the ticket unless you paid right there … Now they want to charge you $15 for the first bag. That’s ridiculous. I’ll switch airlines.”

A spokesman for Seattle-based Alaska Airlines/Horizon Air which carries nearly half the passengers traveling through Sea-Tac, said the airline has no plans to charge for a first checked bag.

Delta also said it had no plans to follow American’s lead, but United said it is considering it…

American said it would not charge to check a car seat or stroller if a parent is traveling with a child, but other baggage charges would apply. Details are posted on the airline’s Web site at www.aa.com.

Millions affected

Unlike the second-bag fee, which affected a small number of travelers, a huge percentage of travelers check one bag, Brancatelli noted.

He predicted that if other carriers go along with American’s policy, many will try to slim down carry-on weight (40 pounds or less). That could translate into longer waits at security checkpoints where carry-ons are inspected.

And that could just be the start of the problems.

“Aircraft have limited storage area, so this will overload the carry-on bin capacity and produce major ‘bin rage’ as competition accelerates for this space,” Foster predicted. “Anticipate delays,” she said, if bags have to be taken off the plane and checked at the gate before takeoff.

My thoughts are that the airlines have nobody to blame but themselves. With few exceptions, no airline hedged their fuel supplies. Hell, Delta even sold their fuel hedge a while back for quick cash.

As the article mentions, there will be delays if American and other airlines follow through on this really stupid idea. What other transportation industry charges you for carrying one or two pieces of luggage with you on a trip? Intercity buses? No. Amtrak? No. Long distance ferries? No.

Thankfully, there are a few airlines that do have better management. I predict their flights will be operating on time because they won’t have to put the carry-on baggage into their aircraft’s cargo hold.

Now, where is the savings or additional income if they have to pay someone to take the carry-on from the aircraft cabin to the aircraft cargo hold?


#12

Standard dami - make a statement that is completely incorrect with nothing to back it up. You can’t even do something relatively simple like invest in the stock market well and now you pretend to know something about a very complex issue like fuel hedging. Here are some facts that demonstrate most airlines do, in fact, hedge their fuel. However, and I wouldn’t expect you to understand this dami, airlines can lose as much money as they save with fuel hedging strategies.

NEW YORK, March 13 (Reuters) - U.S. airlines hedge their expected
jet fuel purchases to protect themselves from rising fuel costs.

A hedge typically involves buying a financial contract in a related
product such as crude oil CLc1 or heating oil HOV7. The financial gains
from those contracts, when the price rises, can help offset higher costs for
jet fuel, which vies with labor as an airline’s largest expense.

Other hedging strategies include so-called “collars,” which are
combinations of put and call options. They generally cost less to put in
place.

Below is a table outlining the hedging positions at major U.S. airlines,
arranged by size of the airline (For story, please double click on
[ID:nN10602896]):

                        PERCENT

AIRLINE PERIOD HEDGED DESCRIPTION
American Airlines FY 08 24
United Airlines Q1 08 15
Delta Air Lines Q1 08 26
Continental Airlines Q1 08 20
Northwest Airlines* Q1 08 45
Southwest Airlines Q1 08 75
US Airways Group Q1 08 50

and (from kellogg.northwestern.edu/res … t_fuel.pdf)

Airline Fuel Expense and Hedging Summary
Fiscal 2003 Max Maturity
ASM Per ASM Fuel as a % Current Years Fuel of Fuel Avg % of Fuel Hedged
Company Ticker (in millions) Revenue Fuel Exp. of Op Exp Ratio Hedged Hedge (yrs) FY04 FY05
Airtran Holdings AAI 1 0,046 $0.091 $0.018 21.5% 2.61x 1999-2005 2.0 35.0% 12.0%
America West AWA 2 3,373 0 .096 0.016 16.4% 1.21x 1997-2004 1.0 11.0% 0.0%
American AMR 1 65,209 0 .106 0.017 15.2% 0.71x 1993-2005 2.0 12.0% 4.0%
ATA (1) ATAH 2 1,126 0 .072 0.013 19.2% 0.29x 2001-2002 1.0 0.0% 0.0%
Continental CAL 7 8,385 0 .113 0.016 14.5% 0.90x 1996-2003 1.0 0.0% 0.0%
Delta DAL 1 34,000 0 .099 0.014 13.8% 0.75x 1996-2004 3.0 32.0% 0.0%
Frontier FRNT 2 ,841 0 .208 0.036 17.9% 1.65x 2003-2004 0.5 7.0% 0.0%
JetBlue JBLU 1 3,639 0 .073 0.011 17.8% 1.75x 2002-2004 1.0 40.0% 0.0%
Midwest Air MEH 2 ,968 0 .129 0.027 19.6% 1.38x 1997-2003 1.0 0.0% 0.0%
Northwest NWAC 8 8,593 0 .107 0.018 15.9% 0.93x 1997-2004 1.5 0.0% 0.0%
Southwest LUV 7 1,790 0 .083 0.012 15.2% 1.34x 1997-2007 4.0 82.0% 60.0%
United UALAQ 1 36,630 0 .100 0.015 13.7% 0.66x 1995-2003 2.0 0.0% 0.0%
USAirways UAIR 5 8,106 0 .118 0.014 11.7% 0.80x 94-97, 00-05 2.0 30.0% 5.0%


#13

Oh, man! If you are going to quote something, how about getting off your lazy behind and make it readable? Or at least learn how to correctly enter a URL here. For those of you out there trying to open the link, you need to remove the “)” from the end of the url. By the way, the data is of out date. It refers to hedging from fiscal year (FY) 2003. Additionally, my point is proved. The 2nd to last set of numbers is the percent of average fuel hedged for FY2004. The set of numbers is for fuel hedged for FY2005. It goes from 7 of the 13 airlines studied hedging
their fuel to 4 of the 13 hedging.

They have hedged in 08 but it’s a little too late for that. Management should have seen the need for hedging much earlier than they did.

Thank you, ca, for proving my point.

Trying to view your 2nd quote above, it appears that most airlines hedged little in previous years.

The first quote you left out data but that’s typical for you. What does the asterisk mean next to NW? And, no, I’m not going to go search for your reference. If it’s a legitimate reference then post the URL here.


#14

Exactly what I would expect from you dami. You pick the only year when fewer airlines hedged their fuel and say that proves your point even though the other two years (of the 3 total shown) show that you are wrong. You also fail to understand why fewer hedged that year and think it’s because they are stupid. If you would do your homework, you would find that is also incorrect.


#15

Airlines also practice a method of fueling where its cheaper and ferrying the fuel back to higher cost areas.

Also, the baggage charges don’t apply to people who purchase full-fare tickets or are a particular advantage level and higher. American really doesn’t expect the charges to affect the main portion of their flying public.


#16

]Travelers furious over American Airlines’ plans to charge $15 fee for one checked bag

As much as I am mad with these absurd fees, I think it is the consumers fault. The consumer wants the lower price and will get IT at the expense of a bare service. Every consumer complains about airlines getting rid of meal services and IFE, but these are the same consumers who said the meals were terrible and IFE sucked. The industry is one of lower prices, not one of loyality. A person’s loyality is their wallot, and because they want the lower prices, they will get it at the expense of services, which includes baggage fees. Trust me, if the consumer wanted steaks in coach, their would be; they want a cheap ticket instead. YOU GET WHAT YOU PAY FOR.

Now I wish the airlines could just raise fares, but because of competition, they are nickel and diming us for every penny.


#17

Just another money handling scheme…


#18

Just another money handling scheme…