Campus News Blog: Airlines Charge for Your Extra Baggage

By Leslie Chase

The end of the semester is drawing near, and for most students that means packing up and heading back home for the summer.

But before you overstuff those suitcases, beware of the airlines attempt to make more money during these tough economic times.

With the economy in a serious slump, many travelers are taking advantage of lower gas prices and traveling by car as opposed to by air. Which mean airlines are having an even tougher time staying afloat. And that means more fees being passed on to the customer.

It wasn’t too long ago that passengers were allowed to travel with two pieces of luggage before being charged additional baggage charges. Now, almost all major airlines are charging passengers for every bag they check.

Major airlines like American, Continental, and Delta charge a $15 fee each way for the first piece of luggage up to 50 pounds and a $25 fee each way for every additional piece of luggage per passenger. That’s $30 round trip for just one checked bag!

So students, when you’re packing up to go home, I would suggest packing light, like a toothbrush and a clean pair of clothes and whatever you can fit into your carry on. Or check out airfare on airlines like JetBlue, which allows you to check one piece of luggage for free, and Southwest Airlines, which lets you travel with two bags for no additional charge.

For those of you that have already booked your tickets back home, spare yourself the surprise of an unexpected charge at the ticket counter and check out a full list of the most current fees for the top 22 major airlines.

Business News: Southwest Airlines Reports First Q1 Loss Since 1991

Posted by Tiffany Adams

The quarter’s loss compares to a $34 million net profit in the same quarter last year.

“The fuel hedging is listed as a special charge because it is a loss not included with the day-to-day operations of the airline,” explained Trebor Banstetter, airline and business travel staff writer for the Fort Worth Star-Telegram.

Excluding special charges, Southwest lost $20 million, largely because recession-battered customers are doing less flying. Southwest’s traffic fell 4 percent.

The first quarter loss of March 1991 was released during similar conditions. The industry was experiencing high energy costs during the Gulf War as well as a mild recession. This was the last time Southwest had a loss in the first quarter.

“While the recession and weak air travel demand aren’t surprises, a loss is always disappointing,” Chief Executive Officer Gary C. Kelley said during the conference call.

In attempt to counteract the loss, Southwest has initiated an early-out retirement program, instituted a hiring freeze, and placed a pay freeze on senior management.

While there is no target on the number of employees Southwest hopes to participate in the early out program, the company is preparing to phase the employees’ exit over the year and will most likely provide incentives including providing flight passes, health care for a pre-determined amount of time, and a specified number of dollars for years worked at the company.

“Depending on the number of people taking the program, they may have to look at something more draconian,” said Banstetter on whether the airline will have to begin layoffs, “but they are going to do everything they can to avoid that.”

Additionally, the Dallas-based company has stopped fleet growth indefinitely and continues to cut out unprofitable flights. Since January, Southwest has reduced daily departures by 190.

Though the company expects another net loss in the next quarter, Kelley looks forward to the recent addition of Southwest gates at the Minneapolis-St. Paul International airport, which he reports has been an “instant success.” Southwest plans to begin service to LaGuardia Airport in New York in June and Boston Logan International Airport in August.

Banstetter predicts these new service options will help in the long term, but probably will not be too significant in affecting second or third quarter results. Kelley stated that despite the loss, the company will continue its tradition of not charging bag fees.

“I’m not at all convinced that [the bag fees] will be revenue positive and it would certainly be disruptive to all the things that we’re trying to do to build the brand,” Kelley said.

With the aggressive marketing of Southwest’s “no hidden fees,” Banstetter commented, “They’ve put themselves into a corner with not charging the bag fees. Now, if they suddenly start charging the fees, they’ll look stupid.”

Banstetter further explained that Southwest would be more likely to raise fares rather than charging fees if it needed to increase revenue. In comparison, Fort Worth-based American Airlines reported an increased $375 million loss for the quarter from the same quarter the previous year, when it lost $341 million. Other major U.S. airlines have yet to release their earnings.

With this combination of promoting its low-fare brand, no-hidden fees, schedule adjustments, and the slowing of its fleet growth, Kelley said, “I think that certainly helps explain why we are out-performing most if not all our competition on the revenue front.”