American Airlines announced last week that it would begin charging for all checked luggage beginning June 15.
American is the first to implement a $15 charge for the first checked bag. Many major airlines, such as Delta and United, have recently started charging for a second checked bag.
The new policy is not universal, according to American’s website. The fee does not apply to full-fare coach passengers, business class, overseas flights or members of the frequent flier program.
“Only a small percentage of our customers will be paying these fees,” said Tim Smith, spokesperson for American Airlines. “The majority of our customers will not have to pay it.“
American is the sole major airline currently adopting this controversial policy, although its spread is conceivable in the new future, Smith said.
“I can’t speak for all other airlines, but a number of airlines have announced that they are considering this policy,“ he said.
American’s announcement comes in light of recent economic problems for many major airlines. Since Sept. 11, rising fuel costs have caused a fiscal crunch for many airlines. Fuel prices have rocketed up 80 percent in the last year, forcing most airlines to find new ways of increasing revenue.
“In general, it is best for prices to reflect the true cost of the product,” said Christopher Knittel, a UC Davis economics professor. “In this case, as gas prices rise, checked baggage becomes a more important factor in the cost of an airline ticket.“
Many airlines have already declared bankruptcy, while most others have added new fees, cut unprofitable routes and decreased salaries.
“Airlines are in a tough situation because fuel is now their number one expense,” Knittel said. “But airlines have never [charged for the first bag], and some consumers may be put off by this decision…. The negative consequences can certainly outweigh the efficiency benefits.“
Consumers are stuck between a rock and a hard place, he said.
“On the one hand, carrying on luggage is now more difficult because of the liquid restrictions. On the other hand, they will now have to pay to check their luggage,“ he said.
American will either lose consumers of all types to other airlines or simply attract a larger fraction of business travelers who frequently carry on their luggage, he added, but the public will not be happy either way.
“AA runs the risk of alienating some consumers because they are now charging for something they never used to,” Knittel said. “This is a real concern.“
The new policy still won’t fix all of American Airlines economic woes, especially if other airlines don’t implement similar policies.
“If other airlines don’t follow, something else will likely need to be done,“ he said.
KELLY KRAG-ARNOLD can be reached at city@californiaaggie.com.
