American Airlines (AA) has announced new fees for checked bags for long-haul passengers purchasing the cheapest air tickets. The move means the carrier is the first major to charge customers for checked bags on all economy tickets.
Basic economy flyers travelling to and from Asia, Australia, India, Israel and New Zealand will now need to pay $75 to check a standard piece of luggage. Those who bought tickets prior to 7 June 2023 when the new rule came into effect will still be able to check one free suitcase, subject to the usual weight and size requirements.
Anyone flying with multiple pieces of baggage will also need to pay $100 for the second item and $200 for the third.
Basic economy tickets were introduced across the major operators as a way to help them compete with budget competitors, who are well-known for their ticket-only model and making customers pay for anything “extra”.
Removing the free checked baggage brings American closer to this model, though it may be at odds with customer perception that major or flag carriers should offer an elevated level of service. It’s also notable that ultra-low-cost airlines fly few long-haul routes, so the notion of making the tickets easier to compare is questionable. Price-gouging is a more plausible explanation.
Savi Syth, managing director of equity research for airlines at Raymond James, told The Points Guy (TPG) that creating “more restrictions to the cheapest tickets acts as a segmentation strategy to extract as much revenue based on each passenger’s willingness to pay.”
In a statement the airline justified the move, saying, “We are simplifying our product offerings to make it easier for customers when they are shopping for travel. With this change, our Basic Economy product will include all of the same features whether a customer is purchasing it for a domestic or international itinerary.”
However, TPG described the fees as “one more reason to avoid [American Airlines’] basic economy fare,” noting that the change came “overnight and without warning.”
AA customers are also disadvantaged these days when it comes to air miles and reward points, after limits were set on the quantity of miles and Loyalty Points they are able to earn from March this year – down to two on the dollar, rather than the previous five.
USA Today notes that the Biden Administration and the Department of Transportation “have been trying to crack down on airline fees, but so far there has been no formal change to restrict bag charges.”