United Air to Charge Some Fliers for 2nd Checked Bag
UAL Corp.s United Airlines, the
worlds No. 2 carrier by traffic, will boost income by charging
some passengers $25 to check a second piece of luggage.
United, the first major U.S. airline to announce such a
policy, said today it expects $100 million in savings and new
revenue from the change. The fee applies to travelers with
cheaper tickets who arent among Uniteds most frequent fliers.
United and other airlines are trying to offset a 50 percent
jump in jet-fuel prices over the past 12 months. Some, such as
Chicago-based United and American Airlines, are studying ways to
charge for non-ticket services, allowing carriers to collect
more money without raising fares higher than competitors.
“Others will watch and see how it works for United, said
Daniel Kasper, a managing director of consulting group LECG
Corp., in a telephone interview from Cambridge, Massachusetts.
“Their response will determine whether it sticks.
Spokesmen for American parent AMR Corp., Delta Air Lines
Inc., Continental Airlines Inc. and Northwest Airlines Corp.
declined to comment on whether theyre considering a similar
fee. A US Airways Group Inc. spokesman said the carrier doesnt
plan to follow Uniteds move.
Some discount airlines such as Ryanair Holdings PLC,
Europes largest budget carrier, charge to check any bags.
Southwest Airlines Co., the worlds biggest low-fare carrier,
began assessing $25 for a third checked bag on Jan. 29.
One-Bag Travelers
“Our customer research shows that only about one in four
customers check a second bag, Executive Vice President John
Tague said in todays statement. Restricting some passengers to
just one free bag “enables us to offer competitive fares to
everyone.
UAL fell $2.56, or 6.2 percent, to $38.58 at 4 p.m. New
York time in Nasdaq Stock Market composite trading. That was the
biggest drop since Jan. 8, according to Bloomberg data.
Moves like Uniteds put responsibility on passengers whose
weight and space needs make them more expensive to fly, Kasper
said. Still, the move may backfire should customers opt for
rivals that dont charge for two bags, or if they try to cram
more into carry-on luggage, he said.
Uniteds charge will apply to customers who buy
nonrefundable domestic economy tickets and dont have at least
“premier status in Uniteds frequent-flier program or
“silver status in the Star Alliance. Uniteds 18 partners in
the marketing network include US Airways, Air Canada, Germanys
Deutsche Lufthansa AG, Air New Zealand, Singapore Airlines, SAS
Group and Air China.
United requires annual flying of 25,000 miles or 30 travel
segments for “premier status, according to its Web site.
The new policy takes effect May 5 on flights within the
U.S., Canada and parts of the Caribbean. It applies to ticket
purchases starting today. For all customers, the charge to check
as many as four additional bags will be $100 each, the airline
said. Previous charges ranged from $85 to $125 per bag.
American is the biggest carrier by passenger traffic.
Tags: budget, europe, fly, irl, mak, managing director, Marketing, marketing network, northwest