The United States-based United Airlines has decided to double the fee it charges some passengers to check a second bag, citing as reason the volatile prices of aviation turbine fuel.
In a statement, United Airlines said that the current fee of $25 would go up to $50 one-way for tickets bought beginning September 23, 2008, for travel beginning November 10, 2008, within the United States, or to or from Canada, Puerto Rico and the US Virgin Islands.
The fee for checking a second bag will apply to one in every seven passengers.
Those exempt from the charge are customers in United First or United Business class, frequent-flyer customers, and active-duty military personnel travelling on orders.
United Airlines had, on June 12, 2008, introduced a fee of $15 to check a single bag.
Stricken by the enormously high prices fuel prices and a slowing down of the United States’ economy, airlines have been introducing fees, increasing fares as well as cutting routes, capacity and jobs in their efforts to survive.
The other major United States-based carriers that charge a fee for the first checked bag are American Airlines, Continental Airlines, Northwest Airlines, and US Airways.
United Airlines is a subsidiary of UAL Corporation with corporate offices in Chicago, the United States. Its largest hub is O’Hare International Airport, the other hubs being Denver International Airport, Washington Dulles International Airport, San Francisco International Airport, and Los Angeles International Airport. The airline also maintains focus-city operations at Narita International Airport near Tokyo, Japan.
According to the statement from United Airlines, the airline expects the revenue from its merchandising efforts, including the baggage fees, to add up to $700 million in 2009.
The airline suffered $72 million in actual losses and $472 million more in unrealised losses.
However, the company said it will “save money on its actual fuel purchases because the price of oil is lower now than it was when it bought the futures contracts, and if oil prices rise, the loss on the futures contracts will decline.”
Fuel is now the single biggest expense for airlines. United Airlines’ fuel bill for 2007 was $5 billion, which was bettered marginally by an $83-million hedging profit.
United Airlines says it expects its passenger revenue for the third-quarter of 2008 to go up by 4.5%-5.5% for each mile. The airline is reducing overall capacity by about 3.6%.