United to Charge for First Checked Bag

Shares of the carrier are sinking.
Author:
Publish date:

UAL's

(UAUA)

United Airlines is upping its baggage fees as part of a continuing effort to offset the rising costs of jet fuel.

The cost to check one bag for domestic travel will be $15 each way and the fee to check three or more bags, overweight bags or items that require special handling will increase from $100 to $125 or from $200 to $250, depending on the item.

The changes will apply to customers who purchase a ticket on or after June 13 for travel within the U.S. and to or from Canada, Puerto Rico and the U.S. Virgin Islands on or after Aug. 18.

However, the $15 service fee won't apply to customers who are flying in first class or business class or who have premier status with United or Star Alliance.

"With record-breaking fuel prices, we must pursue new revenue opportunities, while continuing to offer competitive fares, by tailoring our products and services around what our customers value most and are willing to pay for," said John Tague, executive vice president and chief operating officer, in a press release.

United estimates that the new $15 service fee will apply to one out of three customers, and the potential revenue from baggage-handling fees, including those for checking a first and second bag, will be approximately $275 million a year.

American Airlines, a unit of

AMR

(AMR)

, had already implemented a similar fee.

Shares of UAL were recently falling 18.6% to $5.88. AMR was down 17.6% to $5.02. Elsewhere in the sector,

Delta

(DAL) - Get Report

and

Northwest

(NWA)

were losing about 5%, and

Southwest

(LUV) - Get Report

was off 1.2%.

JetBlue

(JBLU) - Get Report

was escaping the selling, rising 3%.