Virgin Blue may charge passengers for checked luggage

Virgin Blue, the low-cost airline of Australia, is considering charging passengers for checking in their baggage as a part of its bid to cope with high fuel costs.Launched by British businessman Richard Branson’s Virgin Group on August 3, 2000, Virgin Blue is Australia’s second-biggest airline as well as the largest airline (by fleet size) with the Virgin branding.

At the time of launching, Virgin Blue had just 2 aircraft, offering 7 return flights a day between Brisbane and Sydney, Australia. The service was since expanded to cover all major cities  in Australian as well as many holiday destinations.

Virgin Blue had hiked its fares on May 6, 2008.

A spokesman for Virgin Blue was quoteed by the Australian media as saying that though the company was considering charging passengers for checking in their baggage, it had not yet formulated plans to implement the move.

Brett Godfrey chief executive officer of Virgin Blue, said a at a television interview: “A bag costs us more to put through an airplane than a passenger. The airline is also contemplating raising fares and cutting flights because of increased costs caused by surging jet-fuel prices.”

A fortnight ago, Tiger Airways, a low-cost airline based in Melbourne, Victoria, Australia, had started charging a fee of $5 to check in baggage in addition to excess baggage charges already applying to luggage heavier than 15 kilograms.

Jetstar Airways, another low-cost airline based in Melbourne, Australia, and a subsidiary of Qantas, offers a Jetstar Lite option, which gives a $10 or $20 discount for passengers travelling with carry-on luggage only.

Meanwhwile, a statement from Qantas Airways Limited, the national airline of Australia, said the company had no plans to charge passengers to check in luggage. This announcement is nothwitstanding a statemernt from John McCulloch, managing partner of the Oneworld Alliance, which includes Qantas, a week ago that bigger airlines would consider implementing a check-in charge.

John McCulloch had said: “If the industry moves to a standard of charging for an apple juice in economy, the alliance will move in that direction. Airlines would argue that it is the right way to do it. It’s £20 ($41) a bag, £10 for a meal. We are going to see much more of that.”

The United States-based American Airlines, the world’s largest airline, was the first of the larger airlines to charge for checking in luggage, by levying a fee of US $15 on passengers for their first checked bag.

Analysts say that Virgin Blue is losing money and has been unable to increase prices as much as it wanted owing to surplus airline capacity in Australia.

Virgin Blue had, in April 2008, said its net profits for 2007-08 would be less than  $140 million, compared with profits amounting to $216 million in the year before.