American Airlines Increases Bag Fees and Encourages Direct Ticket Purchases
American Airlines announced on Tuesday that it will be raising the cost of checking bags, while also implementing other changes to incentivize customers to buy tickets directly from the airline in order to earn frequent-flyer points. These adjustments are aimed at offsetting the rising cost of jet fuel and increasing revenue for the airline industry.
Effective immediately, the fee for checking a bag on a domestic flight will increase to $35 when purchased online, and $40 if purchased at the airport. Similarly, the fee for a second checked bag will rise from $40 to $45, regardless of whether it is purchased online or at the airport.
For short international flights, which include destinations such as Canada, Mexico, and the Caribbean, the bag fees will also see an increase. The first bag will now cost $35 to check, while the fee for the second bag will be $45.
Elite members of American’s loyalty program, premium-class ticket holders, and those using an American-branded credit card will typically be able to check at least one bag for free.
Customers with overweight or oversized bags will now face graduated fees based on the extent of the excess, starting at $30 for bags slightly over the limits.
Starting May 1, customers must purchase tickets directly from American Airlines, its partner carriers, or preferred online travel agencies to earn points in the AAdvantage loyalty program. Corporate travelers are not affected. Presently, around 60% of American’s ticket sales are direct.
American Airlines aims to enhance its customer loyalty program and strengthen its revenue stream by encouraging direct ticket purchases, aligning with a trend among airlines to reduce reliance on travel agents.
Analyst comment
Positive news for American Airlines as they increase bag fees and encourage direct ticket purchases. These adjustments will offset rising fuel costs and increase revenue for the airline industry. Market impact: increased profitability for American Airlines, improved customer loyalty program, and reduced reliance on travel agents.