American Puts Price Tag On Baggage Claim

Airline To Charge $15 For 1st Checked Bag, Cut Flights To Offset Crippling Fuel Prices

(CBS/AP)  American Airlines will start charging $15 for the first checked bag, cut domestic flights and lay off possibly thousands of workers as it grapples with record-high fuel prices.

American plans to cut domestic flight capacity by 11 percent to 12 percent in the fourth quarter, after the peak summer season is over. That's more than double American's previous plans to cut flying by 4.6 percent in late 2008.

Because airlines follow each other's leads, first-bag fees are sure to become an industry standard, reports CBS News correspondent Nancy Cordes.

"This is not nickel and diming," says Terry Tippler of TipplerTravel.com. "This is survival for the airlines."

American has not yet said which routes it's going to cut, but it is inevitable that travelers in some cities are going to find they have to contend with fewer options - not to mention higher prices, adds Cordes.

In a further sign of the problems facing the industry, Southwest Airlines Co., the most consistently profitable U.S. carrier, won't earn as much the rest of this year as it did in the same period of 2007, Chief Executive Gary Kelly said.

American, the nation's largest carrier, said Wednesday the fee for the first checked bag starts June 15 and that it would raise other fees for services ranging from reservation help to oversized bags. The other fees will mostly range from $5 to $50 per service, the airline said.

Last month American announced it would join other carriers in charging $25 for second bags checked for some passengers, but it wasn't immediately clear how Wednesday's announcement would affect that.

Its proposed fee for a first checked bag would exempt people who belong to elite levels of its frequent flyer programs, those who bought full-fare tickets and those traveling overseas.

Amy Ziff, editor-at-large with Travelocity.com, tells CBS Radio News that the baggage fee is another hit to the strapped consumer.

"They're being ... charged more and more for things that used to be free so that’s not easy to swallow as a consumer," Ziff said.

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Travelocity.com's Amy Ziff says the baggage fee comes at a bad time.

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Delta Air Lines Inc. spokeswoman Betsy Talton said the Atlanta-based airline has no current plans to match American's fee for the first checked bag, but is considering all options with oil at $130 per barrel.

Chairman and Chief Executive Gerard J. Arpey said he expects the new or raised fees will raise several hundred million dollars for American, but that was the best estimate he would give.

The changes were being made to adapt to "the current reality of slow economic growth and high oil prices," Arpey said. He said the fees are an effort to get customers to pay for services they want.

Arpey didn't put a figure on the layoffs, but when asked whether he expected the figure to be in the thousands, he said yes.

Arpey said he wants to cut overhead and costs about 7 to 8 percent but declined to say whether layoffs would equal a similar percentage of parent AMR Corp.'s work force of about 90,000.

American Airlines expects to retire 45 to 50 planes, most of them gas-guzzling MD-80 aircraft. Those were the plane grounded for faulty wiring last month. AMR regional airline American Eagle also plans to retire planes.

American said rising oil prices have increased its expected annual fuel costs by nearly $3 billion since the start of the year.

AMR shares tumbled 24 percent, down $1.98 to $6.22, as oil prices shot past $130 per barrel for the first time, signaling even more trouble for the nation's airlines.

Southwest shareholders also met in co-founder Herb Kelleher's last meeting as chairman.

Kelly, who added the title of chairman on Wednesday, said he expects Southwest to remain profitable, as it has in every quarter since early 1991, but not as profitable as in the second, third and fourth quarters of last year.

"I would love for Southwest to grow modestly next year and in 2010, but at this point we're not making any announcements," he added.

Southwest shares fell 57 cents, or 4.4 percent, to $12.43 on Wednesday.

[barbaraf4]

I guess we will have to contend with the inconvenience even MORE carry-on baggage. I have missed connections waiting for people ahead of me to unload their stuff from the overheads. I''m not sure why people have to bring everything they own when they fly, but I see it getting only worse.

[walt1944-2009]

The airlines are taking a page out of the "I cheat''em and how" book used by banks and financial institutions; that is, CHARGE''EM FOR ANYTHING AND EVERYTHING, EVEN FOR WALKING BY THE PLACE!!!!

With the airlines, today it will be charging for checked luggage, tomorrow, they will charge you for wearing CLOTHES!!!! All in the name of PROFIT!

The Amish had it RIGHT after all!! Under the neocon Fascist Nazi Republicans we are marching BACKWARD TOWARD A BETTER DAY!!!!

SIG HEIL, BUSH!!!!
sig heil, DEFINITELY MORE OF THE SAME, McCain!!!!

[raskal_2]

Now I have to pay them to send my bags to St. Paul when my ticket says Harrisburg. ***... Now how much to get them back?

[judgeben]

Poor airlines, I have a high fuel bill also. I don''t charge my Kids extra to carry their backbacks to school, I just lower the CEO''s (Me) compensation and keep on pushing. I think those who run airlines knew fuel cost would be a consideration sooner or later. I would be seen as irresponsible if I asked the Fed or anyone else for help if I couldn''t afford gas to get my job done. I don''t have any accountants or lawyers to tell me how to invest.

[judgeben]

Poor airlines, I have a high fuel bill also. I don''t charge my Kids extra to carry their backbacks to school, I just lower the CEO''s (Me) compensation and keep on pushing. I think those who run airlines knew fuel cost would be a consideration sooner or later. I would be seen as irresponsible if I asked the Fed or anyone else for help if I couldn''t afford gas to get my job done. I don''t have any accountants or lawyers to tell me how to invest.

[haoli25]

So long American Airlines. We won''t miss you or your high prices and ugly sky waitresses.

[renonv5]

This country is in the most sorry state of affairs that I have ever seen. Get ready for the next full blown depression. It''s gonna be ugly.

[michellem99-2009]

I have one word for them GREED.

[dirtydog55]

I thank my lucky stars thay my monthly trips to DFW are OVER!! Company-paid or not, it was a three-year pain in the asss. I can''t imagine doing it for three more years under the present conditions.


Thank you, George Bush, for effing up our economy.

[mexinvasion]

American Airlines will make a great case study on how a company can destroy itself out of sheer spite. I won''t miss the grumpy employees.

[afmca]

The airlines are taking Bush Inc, up on their scheme to bankrupt middle class America before their term is up and Democrats look into the illegal collusion. The gas and energy price increases were planned for during Cheney''s off the record meeting during Bush''s first term. With Bush leaving and Cheney, etc. not caring who runs the country next, all the industry fat cats are under orders to make their money now. Since there are so many restrictions as to what can be carried on thanks to TSA amd Homeland Security, now you have to check a bag and now they gotcha for $15.

As for the nut cases supporting the airlines .. explain how a person going on a 2 week vacation can pack enough clothes to fit in an overhead compartment suitcase? I bought 3 tickets on American 2 months ago for a trip in July when there was no restrictions as to luggage. I assumed that my luggage was included in the price of the tickets I bought. Since those were the rules when I bought my ticket, then I should be exempted from the new rules .. but not in America where companies are allowed to retroactively charge for everything.

[mexinvasion]

Renonv5:
Most people are in complete denial on the possibility of a Depression like what we had in the 1930''s. But everything is falling into place to create one. Too many just don''t have any money. Not a matter of things not being available. Just can''t afford them. Even for people who don''t have to buy gasoline, they are paying more for a gallon of milk or a pack of cheese slices. The existing number of jobs is going down, but the number of job seekers keeps going up. Consumers spend more than they make. The government makes promises it will not be able to keep. I keep telling everyone to learn how to grow some potatoes of your own. Best way to keep from starving.

[photogeezer]

The public brought some of this on themselves. Families on vacation carrying all their toys, and foreign travelers trying to move their entire household have overloaded the system. A reasonable charge for checking more than one bag is OK with me, but not gouging for just one. This will only encourage the HUGE carry-ons that folks try to stuff overhead, causing rule-abiding passengers to hand over their small carry-ons when they have no place to put them.

[rudy654-2009]

Everyone everywhere, REFUSE TO FLY AMERICAN AIRLINES. Since 9/11 and since our bailout of that worthless airlines, they have treated people like krap.

[ictrep]

Unfortunately, hubby and I are leaving next week to go overseas -- on, you guessed it -- AMERICAN AIRLINES!!! (have had my tickets for 8 months) There is a list of people who are exempt from the charges -- what I want to know is WHO THE HELL ARE THEY GOING TO CHARGE?? -- the dang list exempts most of the dang world!!!

[rdchase]

So will this eliminate my luggage being lost?

[ictrep]

...and I agree with photogeezer -- people try to bring on carry-ons the size of a house, and they get away with it -- rule-abiding people get penalized by not getting to bring on their "regulation" bags!!! It sucks!!!

[ictrep]

To rdchase -- no, they''ll just charge you $200 to find your *** luggage! LOL

[acolton1]

Well I guess when Jet Fuel keeps going up and up just like Gas and Diesel. The airlines are trying to cut corners any place they can to save weight and people usually over pack for trips anyway, I know I use to over pack and not wear all the stuff I took on vacation. I guess with prices and Jet Fuel and all the extra fees everybody is tacking on Vacation at Home or in the State you Live in and going by Car to the Beach or Mountains or Amusement Park is looking better and better this summer. I would love to go to Vegas for 4 days.

[ms38654ob]

I wonder if they''re going to pay us when they lose our bags. AA does a dismal job of keeping track of the bags we check.

[dabsgram]

Well, fortunately for me my return flight on American Airlines in June gets me back home on June 12. I understand how bad fuel prices are, but if American and the other carriers would focus on excellent customer service, maybe they wouldn''t continue to lose so much business every year. I used to love flying, but it has gotten to be such a hassle that it sometimes seems that it is just not worth it. Now we find out that we will be charged for every piece of luggage. Time to rethink my travel plans for September.

[incog-nito]

In other news, the airlines have announced that they will charge passengers for cabin air. The prospect of imminent death provides "a great incentive for customers to pay up", said one airline representative.

[greeneyes222]

Bye, bye, American.

[boston1954]

Well...I''ve seen it all now. So glad I don''t fly anymore. I feel sorry for those that do.

[jerr11]

American''s a good airline, the best out there.

And $15 a bag is nothing these days.

So I say, go for it AA!

And good luck!

[barbaraf4]

Has there been any word on when the airlines will install the pay toilets?

[randynason]

This won''t be enough to save AA. I prefer Delta, anyway. They have fewer crashes.

[cascaisbear]

This will increase the number of people bringing over-sized bags into the cabin. It slows everything down when they refuse to believe it won''t fit. Why doesn''t the gate agent enforce the rule on the size of bags that can be brought on board.
Will the $15 result in improved and faster service when you land?

[ricknuber]

I have a close friend in the airline industry, and this move by AA was no surprise.

Most of AA''s fleet are aging MD80 aircraft. These are horribly fuel-inefficient and decaying. AA does not have the capitol to replace them, and cannot raise funds quickly enough to make a difference anyway.

AA will disappear, and soon. Even if AA had the funds to replace their entire fleet, the first installment of new aircraft would be at least a full year away from delivery.

We will have one or two domestic airlines to choose from, at most. United or Northwest.

[crystalblue3]

It gets even better. Some airlines are now calling the window and aisle seats "premium" seats and are charging extra for them.

Airlines always sucked and now they suck even more. All because the people at the top of the food chains want to keep making the astronomical amount of money they are already making...with no thoughts to the rest of us.

[naucoming4u]

What new charges will the airlines try to implement next?

- Weight premium. Passengers will be weighed at the ticket counter, and charged a premium for any weight above 150 pounds (for men) and 120 pounds (for women).

- All drinks, other than recycled water, will no longer be free.

- A coin-op bathroom.

What''s next?!

[goldesprit]

The airlines need to send heavily encrypted email to each other at highest levels, agree to not fly unless fuel prices come down very substantially, and not negotiate at all.

Then, CNN et. al. should ask for lower fuel prices and voila!!

BUT INSTEAD THE OPPOSITE HAPPENS.

CNN TRIES TO WARN US THAT "we" were warned about (automatically expensive) oil.

[lock-n--load]

I have an AAdvantage frequent flyer number and have had status and been faithful to this airline for many years. I can not believe the ABSOLUTE STUPIDITY of this newest fee. Because of 9/11 we are allowed to carry nothing useful with us on the aircraft. Now we have to pay to check a bag. Last time I looked, when you took a plane somewhere, you intended to be there for more than one day. What should we do--wear the same clothes every day for two weeks? Do they think that we are not hit hard by these outrageous fuel prices? The only difference is we don''t have a profit margin that is decreasing from the billions to the millions. I truly feel sorry for their loss! I think it is time to find a more intelligently run airline to give my travel $$''s to. American needs to get a grip--their service is not nearly as special as they think it to be--another example of delusions of grandeur. Wake up, American Airlines and smell what you are shovelling.

[worldcomment]

Why don''t the airlines actually charge the customers a ticket price that covers the cost of the flight, and include baggage and meals? If the ticket actually paid for the flight, the airlines wouldn''t have to worry about all the incidentals.

If a customer wants to be treated like a sheep and will forego the baggage and the meal, they can fly Southwest, but the reason I pay for "mainstream" airlines is to avoid the bargain basement treatment that matches the fares.

[gce65]

At least it''s refreshing to see Bush admin policy failures impacting a Texas company.

[pugster]

The next thing they would like to do is to charge a $5 premium for a Window seat instead of an aisle seat.

[mickimo-2009]

American should put the $15 luggage charge in the price of the ticket. However, let''s remember AA stayed out of bankruptcy and saved the employees pensions. AA is starting to retire its md80 fleet and replacing them with Boeing''s 737 stretch. the 737 is more fuel efficient and holds more passengers. Also let''s not forget what United did to it''s employees and when their pilots walked off, leaving passengers stranded. How about Northwest, who just fired their mechanics and replaced them all with mechanics, who hold FAA licenses, but who may never have worked on Northwest''s planes. I''m going to stick with AA, if for no other reason: safety.

[rushlimpdrug]

This will increase the number of people bringing over-sized bags into the cabin. It slows everything down when they refuse to believe it won''''t fit. Why doesn''''t the gate agent enforce the rule on the size of bags that can be brought on board.
Will the $15 result in improved and faster service when you land?
Posted by CascaisBear at 05:29 PM

Love this post cause it is sooooo true.

People are allowed to bring on board boxcars to fit
into the overhead bin.

Go figure.

[andyb62]

So now my lugage won''t arrive when I arrive AND I''ll get robbed of $15. Good plan.

[yongamerica]

American Airlines has also installed token slots on the restroom doors. And the tokens can only be bought in 5$ increments at the ticket booth. These tokens can also be used to purchase water and ice in flight.

[samrensho]

I''''m surprised that they haven''''t farmed out the airline crew as well
Posted by davidjones11

Already have here -

Captain: Mohammed Wing
First Officer: Pratap Nassar

[credibility2]

I wonder how long it will take for all of the other airlines to begin doing this. I would like to see roll-ons banned from the overhead, since they take up too much room and slow the on/off boarding processes. Maybe the airlines should start charging on bringing this mini pieces of baggage on board. I detest flying!!

[brianbwb-2009]

Musicians, who carry articles like electric basses are not allowed to carry them on, we are forced to check them as luggage, and when they are lost, stolen, or crushed, the airlines reimburse according to weight.

Thus a $3,000 instrument can be stolen be the ground crew, the airline will pay $14 per kilo, or around $200 for an instrument that can fetch $1,500 used. This almost forces the airlines into a mafia arrangement with their ground crews to steal as many as they can, because even at a 50-50 split, they make a profit.

Sound extreme? I have had two stolen from me so far, now they want me to pay an extra $15 to have my gear stolen?

I will avoid flying now whenever possible, where before I would fly as much as possible. AA can bite me.

[l8c6]

Hmm, that means more people will be cramming more sh*it in the cabin.

[l8c6]

A very good reason to not fly AA. Any airline that encourages more carry on luggage is worth steering clear of. How about charging people for every carry on. I guess as a business, their objective is to reduce the number of baggage handlers. It might work if they''d stop some of the entitled passengers who get by with bringing too much *** aboard.

[lorinkundert]

That''s why I will stay with Southwest, the only airline that is profitable and doesn''t have to resort to extra fees.

[b-easy63]

Everyone BOYCOTT American Airlines. If you don''t the other big airlines will follow their lead. Don''t fly them no matter what--when they see a huge fall off in customers flying, they will have to rethink where they can get more bang for their bucks.

[b-easy63]

The airlines are taking a page out of the "I cheat''''em and how" book used by banks and financial institutions; Posted by walt1944 at 01:18 PM : May 21, 2008

They charge like this because people will pay for it. IN the 1970s advertising and marketing science proved that consumers would pay more if you raised the price for items in little pieces--which is why a 70 dollar suit could be sold in pieces where the pants were 40.00, the shirt 35.00, the jacket 60.00 and the vest was 39.00. The consumer ended up paying twice the price and did not blink. Once they found they could get away with that, every industry started doing it.

Now, you don''t pay higher taxes, you just pay taxes on utilities (we used to not do this) we pay taxes on gas at the pump, we pay higher restaurant tax and hotel tax and user fees and people think they are not paying taxes. We are paying alright--waaaay more than we would if we still had a single source federal and state tax.

Now we have local, county, state, federal and FICA taxes. Remember when FICA did not exist and SS and medicaid were all part of the Federal taxes. If people added the two, they''d find out that they are not in a low tax bracket-they just reshuffled how everyone pays and fooled a lot of people. Same with this--people, this IS a fare increase. Disguised as a luxury tax on those who dare to bring luggage on an airplane (as if they can''t just wear the close they travel in or buy what they need when they get to their destination)

[b-easy63]

CORRECTION:

Now we have local, county, state, federal and FICA taxes. Remember when FICA did not exist and SS and medicaid were all part of the Federal taxes. If people added the two, they''''d find out that they are not in a low tax bracket-they just reshuffled how everyone pays and fooled a lot of people. Same with this--people, this IS a fare increase. Disguised as a luxury tax on those who dare to bring luggage on an airplane (as if they can''''t just wear the CLOTHES they travel in or buy what they need when they get to their destination)

Posted by b-easy63 at 12:17 PM : May 22, 2008