22 May 2008

American Airlines' New Baggage Policy : Is There A Line Between Legacy Airlines & Low Cost Carriers Anymore?

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22/05/2008 - American Airlines' New Baggage Policy : Is There A Line Between Legacy Airlines & Low Cost Carriers Anymore?


Over the past few years the line between "Legacy Airlines" and "Low Cost Carries" (LCC) have been blurring. Yesterday American Airlines (AA) made an announcement that has further removed the barrier between a Legacy Airline and the LCCs operating in the United States.

Before I delve further into American Airlines stunning move in the US commercial airline market, let me quickly define what a "Legacy Airline" and an LCC are.

Legacy Airlines are those that flew interstate routes prior to the 1978 Airline Deregulation Act. There are currently 8 of these airlines operating in the United States, and once Delta (DL) and Northwest (NW) complete their merger there will be 7 left.

Low Cost Carriers (LCC) are discount airlines; they tend to operate with a lower operating structure than the Legacy Carriers. LCCs are most famous for being 'no frills.'

.......so what is American Airlines' stunning move? They announced that they would be implementing a $15 baggage fee for passengers FIRST checked bag, each way, as of June 15th 2008. Need to check two bags? Be prepared to hand over $40 each way for your bags to fly with you. (American Airlines is not charging baggage fees on full-fare tickets, for "elite flyers" and international routes. )

While airlines stared to charge $25 for a second checked bag to make up for losses earlier this year, charging for your first checked bag is one of the worst cases of passengers being nickel-and-dimed by a major airline.

Before you point out that some European LCCs have charged for any checked baggage for quite some time now (and that Spirit Airlines in the US charges for all checked bags), keep in mind that you can get fares as low as €1 + tax on some routes, whereas I tend to find American Airlines one of the most expensive airlines to fly with in the United States.

When you fly an LCC you expect to pay for everything. When you pay less than $100 for a flight of more than 1,000 miles, as I have seen available on Spirit Airlines web site quite a few times, you can shell out the baggage fee, expect a "BOB Meal" (BOB = Buy On Board) and the little missing frills.

Let's compare flight costs.

Looking at Spirit Airlines, flying from Chicago O'Hare (ORD) to Ft. Lauderdale/Hollywood International Airport (FLL), departing on June 5 returning on June 9th, morning departure, evening return, I get a fare of $208 + tax.

Looking at American Airlines flying from Chicago O'Hare (ORD) to Miami International Airport (since MIA is an AA Hub), departing on June 5 returning on June 9th, morning departure, evening return, I get a fare of $668 + tax.

Both airlines serve 'BOB' meals, both airlines now charge for checked bags, neither airline offers me any great advantage over the other, so what does AA offer me for the additional $460? For a savings of $460 I am willing to pay Spirit Airlines for my bags, a sandwich and a soft-drink, I'll still be ahead around $425!

With the loss of perks on most legacy carriers, such as the charging for bags, the removal of movies on some routes, the elimination of in-flight meals, the elimination of pillows on some airlines (Southwest Airlines, the largest and most profitable LCC in the world, still offers both pillows and blankets!) and some carriers changing their operations to move closely match those of LCCs, I have to ask what separates one set of airlines from another? (I'll save that question for another entry on Flying With Fish)

My advice for everyone else? Learn to pack light, learn to pack in legal carry on, learn to use the reservations systems to shop your fares and say "NO!" to these practices by airlines.

Happy Flying!

5 comments:

Eric Hegwer said...

Very interesting stuff. I'm no lawyer but from what you've posted, I think this may be unconstitutional - here's why:
The government mandates the TSA security guidelines - which include refraining from bringing liquids, and other 'weapons' on board the plane.
Now we expect to pay a price to travel, but when we get to the airport there is a 'bait and switch' happening - we can't travel with our stuff UNLESS we pay more.
I'm sure someone can comment on this further.

RHixson said...

I might be cheaper to send your luggage via UPS to your destination / hotel plus not having to deal with it a checkin.

Andrew said...

don't see how it's a constitutional issue and, honestly, don't see how it's a bait and switch. they're not offering you one service and substituting a lesser and/or more expensive service. in fact, the new fee has been so widely reported and communicated that it would be almost impossible for someone to show up at the airport in 3 weeks completely unaware of it.

it may be viewed as unfair or the airline nickeling and diming the customers, but it's not a bait and switch.

Scrid said...

I fly into and out of Chicago - a lot. I've flown with two Legacy carriers into ORD (American and United)and one LCC (Southwest) into MDW. MDW is a 30 minute drive to my actual location, ORD about 5.

Southwest is so very much better - better prices, better times, VASTLY better customer service, better experience. I see no reason to ever fly Legacy when Southwest flies to my destination.

The legacy airlines need to get out their op manuals from the 1950s and turn their niche to a MUCH higher level of service and raise their prices accordingly.

Trying to appeal to everyone, they appeal to no one.

flyingfish said...

I am not a lawyer, I am not a legal expert, however I don't see this as a constitution issue. The US Constitution was create long before Orville and Wilbur ever flew into the history books.

What I see here is a huge challenge of an airline about to butt heads with the TSA and the FAA over passengers rights and the enforcement of carry-on baggage.

American Airlines is the only US Airline ever to stop me an weigh my carry on bags. It happened three times, every time was at DFW. Each time I was informed I'd need to check my bag (which was always loaded the with 2 cameras, an assortment of professional lenses, strobes, remote triggers, etc). Each time I made the airline "IDB" me (involuntarily denied boarding), I called Amex Travel and was booked home on a Delta Airlines flight. I know of other travelers who have experienced this with American Airlines, and those flyers also no longer fly AA.

American Airlines already has made alterations to their frequent flyer scheme that affects some flyers ability to get "status points" on some partner airlines, and has stopped allowing flyers to get status miles on "non-AA metal" during a status challenge, which has driven off other potential loyal flyers.

American Airlines' choice to charge for checked bags will not really affect business flyers. Most business flyers stick to one or two frequent flyer programs and gain "elite" status. Those with status are not charged for the checked bags. Who will be affected? Leisure flyers, families going on vacation.

Bags must be under 50lbs. You can pack 50lbs without even blinking once you factor in the weight of your bags. Under AA's new rules the first bag is $15, second is $25, 3rd-4th-5th are $100, sixth bag or moreis $200 per bag. So the average family of five will fly in thee checked bags, this $240 in baggage fees round trip. Who is going to spend $240 on baggage when flying? No one I know, they'll go buy their tickets on Southwest, JetBlue, United Airlines, Delta Airlines, Alaska Airlines, etc.

American Airlines' has made a rule that hopefully will not ripple in the industry. As I see it now, it will face backlash and be forced (I hope) to retract it.

If American Airlines choosing to continue to randomly weight carry-on bags, then and charge for checked bags, they will lose flyers, or at very least anger flyers which turns into bad PR, which in turn causes people to stop flying their airline.

Want some tip on packing light? visit: www.onebag.com

Happy Flying