Five top U.S. airlines agree not to charge for carry-on bags
ATLANTA -- Five major U.S. airlines agreed Sunday not to follow the lead of a small Florida carrier that plans to charge for carry-on bags. Their commitment comes just in time to cool traveler outrage before the peak summer flying season, but it is doubtful that it marks a change in strategy.
Airlines are going to tack on every fee they can to boost their revenue while keeping base fares lower. They just don't think passengers will tolerate having to pay for carry-ons -- at least not right now.
The promise to Sen. Charles E. Schumer (D-N.Y.) from American Airlines, Delta Air Lines, United Airlines, US Airways and JetBlue Airways comes even though some of those carriers are expected to report first-quarter losses next week. They were hurt by higher fuel prices and heavy February snowstorms.
Ancillary fees for air travel -- including baggage surcharges, reservation-change fees and other add-ons -- have been adding up.
For U.S. carriers, they totaled $1.95 billion in the third quarter of 2009, about 36 percent higher than for the same period a year earlier. For 26 large U.S. airlines, those fees made up 6.9 percent of their total operating revenue in the third quarter of last year, according to the most recent government data available.
But major carriers risk alienating customers if they follow Spirit Airlines' lead and impose a fee for carry-on bags. In August, Spirit will begin charging customers up to $45 to place a bag in an overhead bin. Like most airlines, it already charges for checked bags.
Other fees haven't stopped people from flying, but many can be avoided. Traveling with neither checked nor carry-on baggage would be difficult.
"We believe it is something that's important to our customers and they value, and we will continue making that available to them at no charge," American Airlines spokesman Roger Frizzell said.
It wasn't clear how long the five airlines plan not to charge for carry-ons. Frizzell couldn't say, and a spokesman for Delta declined to comment.
Schumer and five other Democratic senators -- Jeanne Shaheen (N.H.), Benjamin L. Cardin (Md.), Amy Klobuchar (Minn.), and Robert Menendez and Frank Lautenberg (N.J.) -- support legislation that would tax airlines if they charge fees for carry-on bags.
Schumer said the legislation will proceed until it becomes clear that no airline will institute the charges. He will have an uphill battle changing the minds of Spirit executives when he meets with them soon.
Spirit chief executive Ben Baldanza said Sunday that his airline will move ahead with its carry-on bag fee.
"Our plan was never predicated on anyone matching us," he said. "The fact that other people are saying they won't has never changed our view that this is right." He said his competitors' decision actually puts pressure on those airlines because Spirit has lowered its fares more than the price of the new fee.
"We knew we took a risk with this strategy, but we believe on balance it's one that our customers will buy into," Baldanza said.
Analysts expect several major carriers to get back in the black in the current quarter -- the second quarter -- and in the second half of the year, because of the summer and holiday travel rushes.