Monday, September 15, 2008

Airlines discover supply and demand

United has increased its second bag fee from $25 to $50 — blaming falling fuel prices. Together American and United had raised bag fees from $0 to $80 round trip, and now United wants to take that to $130 round trip for those bags (unless a lot of flyers complain).

Not surprisingly, adding fees has cause travelers to change their behavior. USA Today reports Tuesday

American Airlines, the nation's largest carrier, says the average number of bags checked per passenger has dropped since it began imposing fees ($15 for the first bag, $25 for the second) earlier this year. Prior to introducing the fees, an average of 1.2 bags were checked per passenger. Now, it's slightly below one, spokesman Tim Smith says. "The biggest percentage drop is in the second bag (checked). It was more noticeable."

United Airlines, which said Monday that it will raise the fee on the second checked bag to $50 from $25, has also seen a decline in the average number of bags checked per person since February, spokeswoman Robin Urbanski says.
Southwest is still leading the industry in low fees, with the Big Four carriers (AA, UA, USA and Delta) dead last. Until people switch their flights, the airlines will continue to tack on these surcharges, making for an unpleasant carryon baggage experience for all.

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