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Quick Hits: American Airlines' Extra Baggage


Brief scrutiny of today's headlines.


The friendly skies just got, well, a little less friendly.

The Wall Street Journal reports that American Airlines (AMR) will charge some customers $25 for a second checked bag. The move comes just days after the carrier posted a quarterly loss of $328 million. For beleaguered passengers, it's just the latest fee to be tacked on to once-complimentary services like meals and curbside check-ins.

American Airlines isn't the first to charge for baggage handling. United Airlines (UAUA), which reported a first quarter loss of $537 million, pioneered the trend over two months ago. Industry experts believe it won't be long before other airlines follow suit.

But here's the good (if not slightly confusing) news: American Airlines expects only 4% of its passengers will actually pay the fee. Frequent fliers and those who've purchased full-fare tickets are exempt. Ditto passengers travelling internationally.

Bottom line: The only people being penalized are infrequent travelers who don't go very far, but pack a lot.

No positions in stocks mentioned.

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