American to charge for first checked bag

May 21, 2008 8:43:14 AM PDT
American Airlines will start charging $15 for the first checked bag, cut domestic flights and lay off workers as it grapples with record-high fuel prices. But rival Delta doesn't plan to match American's fee for the first checked bag, a spokeswoman said.

American, the nation's largest carrier, said Wednesday the fee for the first checked bag starts June 15 and that it would raise other fees for services ranging from reservation help to oversized bags. The other fees will mostly range from $5 to $50 per service, the airline said.

Last month American announced it would join other carriers in charging $25 for second bags checked for some passengers, but it wasn't immediately clear how Wednesday's announcement would affect that.

Its proposed fee for a first checked bag would exempt people who belong to elite levels of its frequent flyer programs, those paying full-fare tickets and those traveling overseas.

The planned fee on the first checked bag immediately ran into resistance. Delta Air Lines Inc. spokeswoman Betsy Talton said the Atlanta-based airline is considering all of its options in light of $130-a-barrel oil, but doesn't plan to match the $15 fee American announced.

American plans to cut domestic flight capacity by 11 percent to 12 percent in the fourth quarter. American had previously expected fourth-quarter capacity to fall 4.6 percent from the same period in 2007.

Parent AMR Corp. said reduced flying will lead to an undisclosed number of job cuts at both American and its American Eagle subsidiary.

AMR expects to retire 45 to 50 planes from its fleet, most of them gas-guzzling MD-80 aircraft. Those were the plane grounded for faulty wiring last month.

American said rising oil prices have increased its expected annual fuel costs by nearly $3 billion since the start of the year.

AMR shares tumbled $1.23, or 15 percent, to $6.97 after the announcement which came as its shareholders gathered for their annual meeting.