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United’s new bag fee hits infrequent flyers hardest

Let’s begin with what most journalists are too polite or policy-constrained to say: United’s recently announced baggage surcharge ($25 for the second checked bag) is a cynical gouge.

Unhelpfully, much of the media analysis has linked the fee to the high cost of fuel. While fuel prices may indeed be putting the profit squeeze on United and other carriers, bag surcharges are hardly the appropriate response.

If fuel prices spike, airlines should temporarily raise their ticket prices or assess a limited-time fuel surcharge. That way, when fuel prices ease, the price of tickets will decline as well.

Travelers know jet fuel costs are at all-time highs. And they understand those costs ultimately must be passed along to flyers. But they expect the price increases to vary with the severity of the fuel situation.

Consumers should harbor no illusions about the relationship between United’s fuel bill and its new fee: The baggage surcharge will not be lifted when the price of fuel declines. The fee is effectively a permanent price increase for passengers traveling with more than one checked bag.

And it’s the kind of extra expense that will come as an unwelcome surprise precisely to those travelers who will be disproportionately called upon to pay it.

Who is likely to bear the financial brunt of the new policy?

Business travelers are notorious for carrying on all their bags (often in blatant disregard of the airlines’ carry-on restrictions). So they will be mostly untouched by the bag fee.

The primary source of what the Associated Press reports will be $100 million in new annual fees: the infrequent leisure traveler. The people who travel the least and pack the most. The people who are least likely to be aware of the extra fee for checking a second bag. The people least able to afford the extra expense.

And to guarantee the policy’s regressive effect, United has exempted elite members of its mileage program from the fee. So the move effectively adds value to elite status.

United apparently believes its fortunes hang on a reverse Robin Hood strategy, robbing the poor and enriching the already affluent.

Unfortunately, given the nature and direction of the industry, it’s likely that United’s move will be matched by other mainline carriers. They’ll be able to claim that United forced their hand. United has no such excuse.

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