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United, US Airways to hike baggage fees

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Written by editor

Infrequent fliers who travel this summer may soon have to pay more to check their bags at the airport.

Infrequent fliers who travel this summer may soon have to pay more to check their bags at the airport.

United Airlines and US Airways are nudging up baggage fees, and analysts expect other carriers to follow.

As of June 10, United Airlines plans to hike its luggage fees by $5 per bag for customers who pay for the service at the airport, charging $20 for the first bag checked and $30 for the second.

Customers of Chicago-based United who pay the fees online will be charged the old rate: $15 for their first bag, $25 for the second.

Phoenix-based US Airways, a code-share partner of United’s and a fellow member in the Star Alliance, plans to roll out the higher fees July 9.

Both charge the fees only to passengers who aren’t elite members of their frequent-flier programs and who are traveling in North America on discounted tickets. First-class passengers are exempt.

United spokeswoman Robin Urbanski said the latest hike is intended to “encourage more of our customers to take advantage of our Web site and check in from home or office.”

Luggage fees and other a la carte charges have quickly become an important source of revenue to U.S. carriers, which are struggling to become profitable. The 21 largest U.S. carriers generated $1.2 billion in baggage fees in 2008, according to the Bureau of Transportation Statistics.

United, the third-largest U.S. carrier, said it generated $259 million in fee income in the first three months of 2009, or about $14 per passenger.

Many experts predicted that carriers would suffer a consumer backlash last summer as American Airlines introduced a fee for the first piece of checked luggage, and other carriers quickly followed.

But while they may have voiced anger at the new charges, consumers appear not to have changed their purchasing behavior, said aviation consultant Michael Boyd.

“If the consumer is willing to pay $20 rather than $15, United would be remiss in not charging it,” said Boyd, president of Colorado-based Boyd Group International. “You don’t leave money on the table.”

Airlines are enjoying some upsides to the luggage fees. Reports of lost bags have dropped dramatically over the last nine months, a result of fewer checked bags and a reduction in airline capacity.

And by encouraging passengers to pay baggage fees online, carriers should have a better idea of the space available for other types of cargo that they also ship in aircraft holds.

But the new charges are also creating a deeper divide between technology- and travel-savvy passengers and those who don’t travel often, noted aviation consultant and former airline executive Robert Mann. “You’re basically saying you don’t care about the infrequent customer,” he said.

“If you can’t check in online, you’re just going to get hosed,” added Mann, president of R.W. Mann and Co. “We’re breaking the customer segments into the haves and have-nots. … This goes along with the continual outsourcing of work to the customer. It’s largely become a self-service industry.”

Analysts think that bargain-minded customers will put up with the charges, to a point.

Ryanair, the pugnacious Irish discounter that led the trend toward a la carte fees, is testing those boundaries.

After considering charging passengers based on their weight and introducing coin-operated lavatories, Ryanair this week announced it would start charging a new boarding-pass fee, even to customers who print out their travel documents at home.

“They may be pushing it to the point where flying feels like you’re in prison,” Boyd said. “People may just say, ‘I don’t want to fly your airline.’ ”