When American announced its new $15 fee each way for checked bags, we received more than 60 comments from readers upset with the policy.
Mark DuPont, American's vice-president Airport Services Planning, spoke with me yesterday about the checked bag fee and other changes at American. I raised several of the questions that readers have raised. DuPont's answers have been edited for space and clarity.
Why did you add the $15 fee for checking any bag?
The price of crude oil is much higher than it was a year ago. It's nearly $140. The effective price for airlines is about $30 more than that, because of the cost of refining it for jet fuel. We believe that our pricing for the services we provide customers is very competitive. We estimate that only about one in four passengers will pay the fee, after you account for the fact that some people will pack more efficiently to avoid the fee and others will buy tickets that are exempt from the fee (first class, business, many full-fare tickets, and ticketholders who have elite status in AA Advantage or in Oneworld, our alliance with select foreign airlines.)
But why not raise your fares instead?
If we raised our fares, and our competitors didn't, we would no longer have competitive fares and we would lose customers. We estimate that 78 percent of our customers fly us only one time in the course of a year. They are not repeat customers in a short-term sense. Many of these customers buy their tickets online. If we don't have the lowest price on a route and if we don't show up on the first screen of airfare search results, we will lose the business of customers. We have attempted to raise fares, but this has not been as successful. We know for certain that we will make several hundred million dollars on an annualized basis by charging this fee. We could not be sure that we would make the same revenue if we raised our fares instead, because we can't predict how many people will stop buying tickets as a result of a fare hike.
[Editor's note: Last week, American Airlines briefly raised its fares again, but rivals did not match the fare increase and earlier this week it lowered its fares again. Yesterday, American Airlines raised its fuel surcharge by $20 per round trip on many routes.]
Some of our readers have commented that the $15 fee should come with a guarantee that bags will be delivered on time. They say it is unfair to pay a checked bag fee and then not have the bags be delivered properly. What do you think about that?
UPDATE: June 13, 12:23 p.m.: Editor's note: I misquoted Mark when I wrote: "We do not have a policy of refunding fees if a bag is lost and never delivered." Here is what he actually said, "The bag policies will continue to be the same as they have been prior to this new charge. As in the past, we will continue to evaluate each lost bag on a case-by-case basis."
But we are always reviewing our policies. I would like to point out that we have a pretty amazing delivery rate. 991 out of every 1,000 bags are delivered with their customer at the same time. Of the rest of that missing 0.9 percent of luggage, the majority of those bags end up being on the next flight in to that destination. When you consider those percentages, very, very few bags are ever actually lost.
What can customers expect when they show up at the airport, starting next Monday?
Those passengers who have to pay the $15 fee will be able to do so at the curb using a credit card. Our skycaps are trained to handle this function. I would like to add that starting June 15, the $2 curbside fee that used to be applicable to all passengers using curbside check-in will no longer exist. Right off the bat there is no longer that fee, and that's good thing.
If you prefer to, you can instead go inside the terminal and deal with an agent to check your bags and pay your fee. Or, if you want to use our self-service kiosks, all of our kiosks will be ready to let you check in as you do today. When you enter your credit card or your record locator number, the kiosk will let you know if you must pay the fee or if you are exempt from having to pay the fee. It will make you aware if you don't have to pay (because you're flying business class or are exempt for some other reason).
If you do have to pay, the screen will indicate you are subject to the $15 bag fee, it will ask if you want to use your credit card, and then you move as you would to the agent. The agent will tag your bag with a sticker for your destination and he or she will give you a receipt for your $15 charge.
If you go to the counter and deal with the agent, you'll pay then. They are prompted by computers to ask for the charge automatically. You pay your fee and you move on.
We will position AA agents or some vendor contractors to assist people before they get into security lanes to make sure that they have not exceeded the check-in limits. If they exceed the check in bag limits they will be sent back to repack and dump any items that exceed the limit.
We list our carry-on bag limits at our website. The basic rule is this: "You're allowed one carry-on bag and it must fit in an overhead compartment or under the seat. It should not exceed 45 linear inches (length + width + height should equal 45 inches) and it should not weigh more than 40 pounds. You're also allowed to bring one personal item (briefcase, purse, or laptop item).
If you get through security and get to the gate and if you're within our carry on policy, you'll be boarded as normal. If the carry on bin space is full, we will gate check your bag and make sure it's available on arrival at your destination. If you are instead exceeding your carry on requirement, then you do subject yourself to a fee at that point.
UPDATE: June 14: [Editor's note: A reader has asked for a clarification of this fee. Here it is: "The fee that would be charged if a passenger has not adhered to the carry-on policy is the new first checked bag fee of $15 because the bag would then have to be checked," according to a spokesperson for the airline.]
Our goal, though, is to prevent people from getting to the gate with excess carry-on bags in the first place.
There are no taxes on the fee. $15 is the flat charge. If you have multiple stops toward your destination, you still only pay $15 for the route. The fee is one-way.