United luggage fee amounts to big fare hike, industry observers say
ASPEN ” United Airlines’ move to charge domestic passengers $25 to check a second piece of luggage essentially equates to a $50 airfare increase for winter travelers to Aspen, aviation experts say.
“This, in disguise, is the largest single fare increase I have ever witnessed in the 17 years I have worked in this industry,” said Bill Tomcich, president of Stay Aspen Snowmass and the local liaison to the airline industry. “This is the first time that a major carrier has done this.”
The Chicago-based airline announced Monday that it will charge the fee beginning May 5 and is a result of high fuel prices. United executives, in their justification for the unprecedented move, said the fees will enable the airline to keep fares competitive.
But for skiers and boarders who travel with at least two bags full of gear and winter clothes, the fee is nothing but a targeted airfare increase for the leisure traveler.
“It looks to me like it’s opportunistic gouging,” said Mike Boyd, president of the Evergreen-based Boyd Group, an aviation consulting firm. “It’s not good news for ski areas.”
The $25 fee also has far-reaching implications for travelers going to major hubs like Denver International Airport, where they arrive and disperse to ski resorts throughout Colorado.
“It’s one less reason to fly United,” Boyd said, arguing that many travelers might opt to go to ski resorts around the country that aren’t served by United.
The charge will hit travelers who buy nonrefundable tickets unless they have elite status in the airline’s frequent-flier program. The airline estimated the rule change will generate more than $100 million annually in cost savings and new revenues.
“That’s tacky and poor taste to brag that they will get $100 million out of this,” Boyd said, adding that the fee likely will be charged at the ticket counter, which will put front-line employees at odds with travelers arguing about a flyer’s status. “It’s going to get ugly.”
Asked whether he was surprised by the move, Boyd said, “Nothing surprises me about United.”
He added: “People in the top offices in Chicago need to come out of their ivory towers and look around.”
Exemptions will go to those who have flown at least 25,000 miles on United in the last year, giving them “premier” status or higher in its mileage plan, and people traveling with them on the same reservation.
In addition, travelers who purchased more costly refundable tickets, people traveling in first-class and business-class and on military and government fares will not be affected. Car seats, strollers and wheelchairs don’t count as second pieces of luggage, according to The Chicago Tribune.
If other airlines don’t follow United’s lead, the carrier might have to consider rescinding the new luggage policy or risk losing bargain-oriented customers who are not frequent fliers, industry observers said.
“We’ll wait to see if the other shoe drops,” Tomcich said. “United is either going to sink or swim based on the competitor response.”
No other major carriers have weighed in on United’s move, but Boyd predicts that they might use it to their advantage.
“If they see United getting away with it, they might,” he said. “But they will probably use it as a competitive edge.”
Southwest Airlines last month began charging customers $25 to check a third bag.
About one-quarter of United customers check a second bag, the airline said. In addition to generating new revenue, the airline predicts the $25 fee will encourage people to pack more efficiently, according to The Chicago Tribune.
The new fee takes effect for travel beginning May 5 and applies to tickets purchased on or after Monday on flights within the U.S. and to Canada, Puerto Rico and the U.S. Virgin Islands.
The cost savings are expected to come from handling fewer bags, which could mean less weight on the plane as well as less time loading luggage. But some of the operational efficiencies could be offset if more passengers carry bags on board, which could slow boarding times.
And it could create logistical nightmares for resort airports like Aspen where regional jets have weight restrictions. If people attempt to bring heavy carry-ons, they might be sent back to the ticket counter to check the bag, which would slow boarding times even more.
United said the new luggage policy could mean more carry-on bags but it does not know for sure. Second bags checked at the gate will not incur the $25 fee, a United spokeswoman said.
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