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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.