Delta Joins Airlines in Era of $30 Bag Fee
(Bloomberg) -- Delta Air Lines Inc. raised its fee for a first checked bag to $30, following in competitors’ footsteps as U.S. carriers expand efforts to offset stubbornly higher fuel prices.
The $5 increase at the No. 2 airline means most U.S. travelers will pay $30 for a first piece of luggage and $40 for a second. United Continental Holdings Inc. and JetBlue Airways Corp. boosted the charges last month. American Airlines Group Inc., the world’s biggest carrier, hasn’t changed its fees.
Delta’s move extends an industry push for more revenue from items other than tickets. U.S. airlines already are slowing growth in the last half of the year in an effort to tighten the seat supply and gain added power to raise fares. Fuel prices have climbed about 27 percent in the last year, adding pressure on an industry that’s facing a third consecutive year of declining profits.
“Delta offers a variety of optional products and services and routinely makes fee adjustments,” Morgan Durrant, a spokesman for the Atlanta-based airline, said in an email about the change, which took effect Wednesday. He declined further comment.
United generated $3.39 billion last year from bag fees and other products and services priced separately from tickets, according to IdeaWorks Co. Delta got $2.38 billion while American brought in $2.2 billion. Thirteen U.S. carriers collected $4.6 billion in bag fees alone last year, according to U.S. Transportation Department statistics.
JetBlue, which didn’t have a bag fee before 2015, kicked off the flurry of increases on Aug. 27. While Southwest Airlines Co. remains the only large U.S. carrier without a fee for a first or second checked bag, the Dallas-based airline raised its early boarding fee on Aug. 29.
American Chief Executive Officer Doug Parker declined to comment Tuesday on whether the airline would boost bag fees. It was the first U.S. carrier to adopt a checked-bag fee of $15 in May 2008. The charge followed a surge in jet-fuel prices during a year in which airlines also reduced schedules and cut jobs.
Delta’s higher bag fees won’t affect passengers who bought tickets before Wednesday.
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