Airlines Look into the Brink With Baggage Fees

(MoneyWatch)  The loopy pricing policies of U.S. airlines got a bit saner today with a United Airlines' bag-checking program that could signal a reversal, or at least a halt, to tacky add-on fees that struggling carriers first instituted when fuel prices soared.

United, the third-largest U.S. airline, is offering a $249 "subscription" program that lets travelers check two bags at no cost on all flights for a one-year period. United charges $15 for a first checked bag and $25 for a second -- $80 total roundtrip - so travelers bringing two bags each trip begin saving on their fourth roundtrip flight of the year.

The bigger bonus is that the Premier Baggage service covers luggage checked by up to eight people traveling under the subscriber's same confirmation code. So a family of four carting eight total bags would immediately save on the $320 they'd face in baggage fees for that single roundtrip.

United's discount program comes as Southwest Airlines continues a formidable advertising campaign promoting the fact it doesn't charge for a first or second bag. Southwest similarly stands apart from competitors on the consumer-friendliness front in not charging fees for canceling a flight. Ticket holders get credit for the full ticket amount good for one year, where other carriers give refunds only after deducting a $100 cancellation fee.

The scope of add-on fees has broadened since the airlines sought to raise revenue without significantly raising fares in response to skyrocketing fuel costs. Carriers have levied fees for everything from once-complimentary soft drinks, pillows and blankets to aisle seats and early boarding privileges.

The tactic succeeded in frustrating a mounting consumer movement -- empowered by the almighty search engine - that was squeezing airlines by forcing them to compete on fares easily compared to competitors'. By instituting their own set and level of fees, the carriers actually made it harder for shoppers to compare costs than in the days before the Internet because they'd need to inquire about a fare and a laundry list of extra fees, too, in calling customer service phone numbers - or even now in searching company Web sites.

Consumer advocates decry the add-ons as a deceptive way for airlines to get around direct price competition. Of course, what gets lost in their laments is that U.S. air fares today are far lower on an inflation-adjusted basis than when the industry was deregulated 30 years ago.

Baggage fees certainly have been a huge revenue generator for the airlines. The U.S. Department of Transportation found U.S. carriers took in $670 million from them this past April-through-June quarter - triple the amount in the year-earlier period.

United's Premier Baggage is actually a shrewd loyalty-building device more than a discount program. It encourages subscribers to simply turn to United for all ticket purchases to reap checked-bagged savings, rather than investigate whether they could get far lower fares on other carriers for the same trip.

The long and the short: The program might serve some business travelers and family vacationers well, but no matter what type of traveler you are, if price is your primary consideration when buying airline tickets, don't buy into this.