Originally Posted by
Myveggies Airlines started doing baggage fees because they are all losing money due to the combination of less passenger/higher fuel prices. They needed to recuperate money from somewhere. Other tactics are booking changing fees, online seat select fees. What the cell phone carriers are doing cannot even measure to what the airlines are doing.
The reason why southwest airlines is still not charge baggage fees is because their smart CEO decided to pay in advance of fuel prices and locked in a rate a while ago. Seems stupid then, but unlike other airlines, the guy had vision and who's laughing now?
I agree to a certain degree.
Airlines started charging baggage fee when the price of oil peaked @ $147/barrel in July 2008 and JetA peacked at $2.50/gallon. For those Airlines that didn't hedge their fuel, this is where the problem started. SWA hasn't charged a baggage fee, because they were hedged during the peak of the oil runup like you said. Just after they peak of the runup, SWA started loosing their hedges because they were selling their fuel for a SUBSTANTIAL profit to assist other airlines in their fuel price crisis.
Last time I looked, Oil was at $73/barrel, but airlines have not decreased their fees, but have INCREASED their fees for checked baggage. And Continental started this round, and AA was the last one to change (but not effective until tickets purchased 1 Feb or later).
Just thought I'd throw that out there, I'm intimate with the Aviation Industry. I refuse to check my bags now for this purpose. If they were "true" fees, they would have been dropped. But I read a story last week, that in the 3rd Quarter alone, United States Airlines as a hole generated $779M from checked baggage fees. Hard to turn that kinda money, good business sense from their end. And honestly, who will argue about an extra $25 fee? LOL
/hijack.