United Airlines is raising checked bag fees for flights purchased April 3 onward by $10 for travel in the U.S., Mexico, Canada and Latin America.
- First checked bag fee goes up $10 to $50
- This is discounted by $5 if prepaid at least 24 hours before departure (when you might not have packed yet and might pay for an extra bag you don’t use)
- This is a $10 increase.
This week United’s BFF and possible acquisition target JetBlue led this round of bag fee increases (as it commonly does).
Once JetBlue went first it wasn’t surprising to see another airline match. And now that United has done it we can expect to see more follow.
Of couse, moving more of the total fare into fees saves the airline taxes. The 7.5% excise tax on domestic airfares does not apply to fees. So this is tax arbitrage as well as an attempted fare hike. Congress encourages ever-increasing checked bag fees because of the disparate tax treatment that they receive.
Customers with United and Star Alliance elite status, as well as co-brand credit card customers, continue to receive their standard checked bag fee waivers.
UA really wants to you to get their cc.
In Canada taxes are charged on bags
I’m surprised none of the Big 4 have pushed to get a lower excise tax in exchange for it covering essentially everything that’s part of an airline trip, especially Southwest when they didn’t have bag fees. It wouldn’t have taken much to figure out what percent would be revenue-neutral to the government.
Would have slightly reduced he excise tax burden for the big carriers but likely hit the ULCCs pretty hard as they have a much larger portion of their tickets as incidentals, likely shaving 3ish points off the ULCC operating margins.
And, Gary, when these for-profit corporations come begging to Congress, this time, we really must include meaningful consumer (think US-261, Rule 240 at least) and worker protections as part of that inevitable bailout… however, seeing who’s in charge, it’ll probably just be another smash and grab by our oligarchs. Pathetic.
UNITED RISING
I’ll take them seriously when they start charging $75 and up for carry-on bags. Would do wonders to speed up security screening, boarding and exiting. Especially if it encourages passengers to ship their bags by alternate means.
Seeing that a significant portion of the AATF (≈33%) and other ‘airline’ taxes get siphoned off to non-airline related federal expenses I say well-played. It also puts the 9/11 and Covid bailouts in a different light.
All airlines will increase bag fees as 1. It’s probably easier to pull off than fare increases. I’d bet the data shows infrequent flyers book a fare without regards to how much they might pay for bags or seats 2. Bag fees are pure profit while a fare is not.
But if oil prices (jet fuel) prices remain elevated fares are going to have to go up too.
When are we going to realize that this pattern of bailouts for nothing isn’t working. Inevitably, this downturn/fuel crisis is gonna lead to those CEOs using the lobbyists to get a sweetheart deal for another $54 billion in grants (like in 2021), likely with no strings attached. Wish we’d at least get some baseline consumer (think EU261 equivalent, bringing back Rule 240) and meaningful worker protections (can’t just fire them all on a whim to juice numbers around reporting periods) out of handing over all that public money (it is our tax dollars after all, mostly going to top executives and majority shareholders, all for golden parachutes and stock buybacks.) It’s the least we can do to hold these ‘banks with wings’ more accountable.
george,
fares have already gone up quite a bit.
This is just the next step and a likely indication that UA and/or other airlines are seeing resistance to fare increases.
UA just announce a $10 RT fare EWR to LAX, but the boarding pass fee is $700.
Didn’t realize the Int’l baggage creep had gone so far – granted – haven’t booked Central/South America on UA – so probably wasn’t on my radar – meanwhile Int’l EU/Asia/Africa 1st and 2nd checked bag still free (but only #50 -used to be two 70# checked bags (only really made use of 70# on trips to Philippines).
Have Amex DL BizPlt/Citi AA/SW Biz Premier and UA Quest/Biz and Atmos Summit.
I hate that UA requires you to book with UA card to get the two checked bags pp free – the Quest card has mid-level Card travel benefits better than CSP/CIP but less than CSR/RC – honestly hasn’t been an.issue till I booked a domestic UA Award (first in many years – and you have to use Quest to pay taxes).
Unless the AF has been grandfathered will likely PC to no AF card if it goes up to $350).
That said planning on downgrading a bunch of cards this year.