American Airlines to charge for first checked bag

NEW YORK -- For some time now, cash-strapped airlines have been doing away with once-complimentary perks such as earphones, meals and extra legroom in exit rows.

Now the largest U.S. carrier is testing the limits of passengers' willingness to pay for extras, announcing plans to start charging $15 for what many fliers consider a downright necessity: a single checked bag.

What's next?

"Pay toilets in the coach cabin, maybe," joked longtime airline consultant Mike Boyd.

American Airlines' move is part of a larger effort by the industry to find new ways to improve revenue in the face of soaring fuel prices and a slumping economy. The airlines anticipated a multibillion-dollar loss this year, even before oil's latest spike above $130 a barrel Wednesday.

Still, the latest effort could be a tough sell with passengers.

"It's ridiculous," said Louise Schum, a 23-year-old student from Steamboat, Colo., on a 10-hour layover at Miami International Airport. "Charging for luggage is the cutoff line."

Fort Worth, Texas-based American announced the change at the same time it said it would slash capacity and retire at least 75 older, gas-guzzling planes. Gerard Arpey, chairman and chief executive of American parent AMR Corp., said the industry cannot withstand sky-high oil prices and must find ways to cover rising costs.

Travelers are likely to see other carriers follow suit, assuming the change becomes permanent.

"They're always going to be looking for additional ways" to make money, said Ray Neidl, who monitors the airline industry for Calyon Securities. "Customers want low ticket prices, and they seem willing to pay for extra services."

The added baggage fee amounts to a fare increase, and it comes on top of a series of ticket price increases and fuel surcharges the industry has pushed through in recent months. But it is also the industry equivalent of a trial balloon that could pop before it gets too far off the ground.

"There comes a time when the nickel-and-diming starts to be annoying," Boyd said.

Under American's plan, many domestic passengers who buy tickets after June 14 will have to pay $15 each way for the first piece of checked luggage. The fee does not apply to passengers who pay full price for tickets, elite members of its frequent-flier program or people traveling overseas.

Carry-on bags, popular with business travelers on overnight trips, will remain free.

"This is not going to apply ... to the people who can most afford it, the business traveler," said Bob Harrell of New York-based travel and aviation consulting firm Harrell Associates. "It's going to be the poor schmo, the vacation traveler, who ends up paying these fees."

American also said it is raising fees for a number of other services, including those to transport pets and check oversized luggage. The airline last month agreed to join other major carriers in charging $25 for a second checked bag.

That means a family of four, with each member checking two bags, must now spend an additional $320 just to get their luggage to and from a destination.

"I think that it's outrageous," said Bill Thompson of New York as he waited to board a flight at LaGuardia Airport. "You get the gas surtax, you get all these baggage fees ... It's awful."

Other passengers were resigned to the fact that flying will continue to get more expensive.

"It wouldn't stop me from traveling ... It's better than having to keep increasing the fares," said Sheryl Bennett, 58, an insurance underwriter from Woodstock, Ga., who was in Miami en route to Key West, Fla.

"If they start charging for carry-ons, then that would be going over the line," Bennett said, although she acknowledged that fliers are "stuck unless we start taking the train or the bus."

American is the first major carrier to charge for a single bag, but it is not the only U.S. airline to do so. Last June, low-cost carrier Spirit Airlines said it would begin charging $5 for the first bag when booking online, or $10 otherwise. Spirit's online charge for the first piece of luggage is set to rise to $10 next month.

With American leading the way among major carriers, other airlines will be tempted to impose baggage charges, too.

"We are actually seriously studying it," said Robin Urbanski, a spokeswoman for United Airlines, the second-biggest U.S. carrier. The Chicago-based airline has not yet decided whether it would match the fee, she added.

No other carriers immediately announced plans to match the fee. But like United, not all ruled it out either.

With energy prices climbing, "all options for reducing costs and generating revenues are on the table," said Tad Hutcheson, vice president of marketing and sales for AirTran Airways. "As bags add weight to the aircraft and burn more fuel, it may get to the point ... where checking bags is unbundled from the air fare."