United’s stupid checked baggage fee increase is a test for American and Delta executives

Gary Leff reports United increasing their checked baggage fees.  This move, which hurts the customer experience, is so United can “…continue investing in the overall customer experience,” according to a United comment.  The charge for the first checked bag increases from $25 to $30 and second bag to $40 on domestic flights (even more for flights out of the country).

Yes, that’s right.  United cares so much about the customer experience that they’re announcing a baggage fee increase the Friday before Labor Day (when news media won’t cover it) with no warning, effective for tickets purchased today going forward.  Is that a great customer experience or what?!  Customers LOVE no-notice fee increases, after all.

Here’s why United is doing this

There are two reasons: 1) United (and all airlines) make an absolutely absurd amount of money from these fees, which are taxed lower than airfares (Gary explains why in the article linked above), and 2) because they can get away with it.

It’s the same thing really all of the airlines are doing: absolute castration of the customer experience until they start losing customers.  Jet fuel prices have been so low that they haven’t really seen the impact of these changes to date but it’s coming and airline execs will wonder where all their passengers went.

What does this have to do with American and Delta?

American Airlines 787-8 climbing out after takeoff

Delta is usually the first airline to come out with nasty unfriendly greedy loser charges like this because, frankly, their airline is reliable enough that they can get away with it.

United and American, on the other hand, usually just copy and paste whatever Delta does.  Yes, that’s the type of leadership these airlines pay millions for, CTRL+C and CTRL+V.  You’d think the government would have one of the most obvious cases of collusio…oh, they do.

My prediction

American and Delta executives will most likely match the charges that United is assaulting their customers with.  American will because they are already investing millions of dollars in making the customer experience worse with their ill-named Project Oasis (cramming more seats into narrowbody jets while removing seatback entertainment) so how much worse would an increased checked baggage fee be for the esteem in the eyes of the customers whose opinions they already ignore?  Delta will probably match these simply because they didn’t have to be first, for once.

What I would love to see happen

Can you imagine how awesome it would be for American CEO Doug Parker to come out and say “We understand what our competitors are doing but we think our current checked baggage fee structure is fair and predictable for our customers as is”?  Man, that would be leadership and defending the existing customer experience!  I’d love to write an article about a quote like that someday but I just don’t think I’ll need to very soon, unfortunately, since airline executives listen way more to wall street analysts than they do the customers who pay money to fly on their airlines.

 

All that said, it’s a holiday weekend here in the USA and many readers will be on the road.  Everyone be safe and have some wonderful journeys!

17 Comments

  1. Doug Parker will probably say “We won’t be increasing our bag fee.” And then they’ll implement a new baggage handling fee of $5.

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  2. My guess is probably a little idealistic, but I’m predicting AA will follow soon without hesitation, but DL will hold off a good while and “lead from behind”. As for me and my house, we will continue to evade this nonsense by flying WN every time we fly.

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  3. I totally get what you say about customer service, but if you’re a corporation whose goal is to maximize shareholder value, you are always looking for ways to increase your profitability. If everyone (AA, UA, DL) does it, it’s not like many customers will even have the option of choosing another airline.

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  4. Not for those of us with the Chase United Explorer card. I can’t remember checking a bag at any time in the last ten years though.

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  5. Great post.

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  6. I don’t like bag fees either, but I don’t think United is stupid: in the face of rising oil prices and shareholder pressure to be profitable, UA had a choice of raising fares or fees to stay profitable. Americans on average are more sensitive to fares than to fees, so UA increased fees. Frequent travelers and travelers who value the experience are insulated from this through credit cards, status or fare…
    Unless more Americans stop staring at the base fare and ignoring the total cost of travel vs experience they get, I’d expect the other airlines to follow suit and the fee increases to continue…

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    • Absolutely correct.

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  7. I usually never comment, but this post is just ridiculous. The only reason United, or any corporation for that matter, exists is to maximize shareholder value. That’s it. Some corporations go above and beyond that, but at the end of the day they are slaves to their owners.

    A baggage fee is only stupid and “loser” like as you put it, IF consumers switch to other airlines and thereby making the move a -EV one. Otherwise it’s a great move. Baggage fees in general have been a GOOD move for the airline industry as they have been able to reduce weight on planes, and charging those who add weight and handling with a bag.

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    • Understand your point but this is still a stupid move. It basically signifies that United has run out of other ideas to generate more revenue and are trying to squeeze more blood from the infrequent flyer stone. Every airline is doing it and it’s not sustainable.

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    • Not sure how it reduces weight when 1. they put the same bags in the overhead compartments – 2. when the overheads are full, they check the bag for free at the gangway. The ones who are really suffering are the flight attendants.

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  8. United airlines doesn’t give a hoot about a good customer experience. It’s all about money and greed and they could care less what their customers think because they have all the cards. It would be refreshing (an unheard of) to see other airlines not follow suit and say “enough is enough.”

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  9. Why I almost always travel Southwest.
    If I want to be screwed, I’ll hire Stormy Daniels.
    The consumers (you know those of us who buy your stuff) are tired of this.

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  10. I think I am in the minority in that I have little issue with checked bag fees. At least you are paying for a service and it does cost the airline money to handle and deliver your bags. The fees that bother me are fees for items that cost the airline nothing and are mainly a way to take advantage of flyers who need to change their flight, or couples who want to sit together. Yes, the dreaded, no cost to the airline, change fee. Change fees are highway, or skyway robbery if you ask me. Southwest does not have change fees but if a couple wants to sit together and not in two middle seats they better get Early bird for $20 each. Even Early Bird is a grab bag (you do not know ahead of time what number you will get) that costs the airline nothing and rakes in $$$$. So I am OK with bag fees. I don’t mind paying for a real tangible service.

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  11. Andy is right. Not all of us are shareholders. For the who fly to a yearly professional conference, visit family or have an emergency, this could be costly. It already is very uncomfortable to fly (seat size, absence of good food, entertainment, leg room, and sometimes hospitality) and this add salt to our travel budget wounds.
    Greed is not good… its mean and often painful to others.

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  12. Doing this will cause even more people to use oversized bags as carryons and hope they can gate check them for free. This happens all the time because the flights are pretty full if not completely full and there simply is not enough room for carryons as it is.

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  13. Southwest does not charge fees as bags fly free.

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    • I fly Southwest whenever I can!

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