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    • May 23, 2008

    That New American Baggage Fee — Boost or Band-aid?

    Filed under: Airline Fees, American — Rick Seaney @ 12:46 pm

    I was just perusing one of the blogs on the Wall St. Journal, when I came across a post about the recent $15 first checked-bag fee.

    What caught my eye was this nugget of information: analysts expect the fee will bring American an additional $320 million dollars a year. Sounds like a tidy sum to me, until you consider that American lost more than that in operating costs in the first quarter of this year alone!

    The first-quarter loss has been pegged at $328 million.

    Unfortunately, the new baggage fee is little more than a band-aid, and a small one at that.

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    1 Comment »

    1. When you do the math, it’s the equivalent of them raising fares a measly 1.4% but with a lower impact on the bottom line as costs will rise, starting from credit card fees to all the extra labor chewed up by the complexities generated by it (plus departure delays).

      Given all the bad publicity, on the surface it doesn’t seem a wise move. If only about 1% of people when they see a choice of two flights click on an airline other than AA because of all the bad publicity, AA will end up losing money because of the new fee.

      Comment by Mike B — May 23, 2008 @ 2:20 pm

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