United Airlines to charge for second bag

The plan will charge $50 extra per round trip for more than one bag and has other carriers looking.

By Alexandra Marks | Staff writer of The Christian Science Monitor

from the February 7, 2008 edition

New York - You might want to pack light, at least if you're flying United Airlines.

This week, America's second-largest carrier became the first major US airline to charge passengers for checking a second piece of luggage. Its goal is to offset the high cost of jet fuel, which has more than doubled since 2000.

Other airlines are watching the move, and some analysts suggest they'll soon follow suit. But other aviation watchers aren't so sure. Charging passengers an extra $50 round trip may simply be a push too far for the flying public. Besides regular delays – 2007 was the second worst on record – fliers have already had to trade in free meals, pillows, and blankets – to say nothing of legroom – for low-cost tickets.

In these days of low fares, high fuel costs, and intense competition from low-cost carriers, United's latest revenue-generating plan is being put to a rigorous test.

"Throw it up against the wall and see what sticks," says Richard Aboulafia, an aviation analyst with the Teal Group in Fairfax, Va. "All cost-saving and revenue-saving moves are basically fungible."

Two decades ago when the first airline cut back on meals on transcontinental flights, that move was "pooh-poohed" in the industry, says Mr. Aboulafia. "But then people said, 'Hey, this sticks.' And they all followed."

Since 2000, the main carriers have been restructured to save costs in light of steep competition from low-cost, point-to-point airlines and the Internet-booking revolution. And with several bankruptcies, the major carriers have slashed their costs. According to the Air Transport Association (ATA), which represents the major carriers, it cost 10 percent less to fly each mile domestically in 2007 than it did in 2000. During that time, the cost of jet fuel more than doubled – and is not expected to drop in the near future.

"The carriers have to remain focused on cost reductions across the board, including fuel conservation, which they are doing," says ATA spokesman David Castelveter. "Equally as important, the carriers also have to focus on bringing in new revenues."

United thus decided to make what could be seen as a daring move by taking a cue from some low-cost carriers and charging for extra baggage. Its reason: Luggage is heavy, and that increases the drag on planes, which increases fuel consumption. By charging for a second bag, they can offset the cost of the extra weight and, at the same time, perhaps encourage passengers to pack lighter. It estimates the move will generate $100 million annually. With each penny increase in the cost of jet fuel costing the industry $190 million to $200 million annually, according to the ATA, that extra $100 million will be welcome. But it does come with some risks.

"Let's say US Airways follows suit and Southwest doesn't," says Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Pa. "For a family of four going to Disney for a week, they're going to have a lot of extra bags. If they have a choice of flying from Philadelphia between US Airways with fees and Southwest without them, guess who's going to get the business?"

United says about 25 percent of its passengers check a second bag. The new policy, which goes into effect in May, will apply only to passengers who book a nonrefundable economy ticket, unless they also have elite status with United's frequent-flier program.