American Airlines: Pack Light Or Pay Up

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American Airlines on Monday became the latest carrier to announce that it would require passengers to pack light, or pay up.

The nation's biggest airline said it must charge passengers $25 for checking a second bag to help offset rising fuel costs.

The fee will apply to travelers who buy domestic economy-class tickets on or after May 12, American said. It will also affect passengers on the American Eagle commuter line.

This year, American, United Airlines, the nation's No. 2 carrier, Continental Airlines, Northwest Airlines, Alaska Airlines and JetBlue Airways have all announced charges for something that has been free since commercial airlines began flying.

Airlines are under immense pressure to shore up balance sheets with the price of fuel reaching unheard of levels. Oil futures hit another record near $120 a barrel on Monday. Gas prices hit a record above $3.60 a gallon.

American's parent, AMR Corp., lost $328 million in the first three months of this year, mostly because fuel costs increased $665 million, or 45 percent, over early 2007.

Fort Worth-based American didn't say how much it expects to raise with the fee, but JetBlue, a much smaller carrier, said it expects to generate more than $20 million this year with a $20 second-bag fee.

American said elite members of its frequent-flier programs, including AAdvantage Gold, AAdvantage Platinum and AAdvantage Executive Platinum, won't have to pay the second-bag charge. The fee also won't apply to full-fare economy, business and first-class tickets, or international trips beyond Canada and U.S. territories such as Puerto Rico and the U.S. Virgin Islands.

Based on those exceptions, American said it expects about 4 percent of its domestic customers who check more than one bag will be charged the $25 fee.

AMR shares rose 25 cents, or 3.5 percent, to $7.69 Monday.


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