Advertisement
New Zealand markets closed
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NZD/USD

    0.5987
    +0.0011 (+0.19%)
     
  • NZD/EUR

    0.5540
    +0.0007 (+0.13%)
     
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • NZD/JPY

    90.4590
    +0.0660 (+0.07%)
     

American Airlines Now Jumps on the Bag Fee Hike Bandwagon

American Airlines Now Jumps on the Bag Fee Hike Bandwagon

Putting all speculations to rest, American Airlines Group Inc. AAL has finally joined its rivals in increasing its baggage fees. The carrier has raised its checked bag fee by $5 each for both the first and the second bags. Per the renewed fee structure, passengers will have to pay $30 for the first checked bag fee and $40 for the second. The revamped fee policy is applicable on domestic routes, Puerto Rico, the US Virgin Islands and the Caribbean with immediate effect. However, certain privileged members will continue to enjoy free baggage checking.

JetBlue Airways Corporation JBLU is the first airline to initiate this move late last month for its domestic services. Other major U.S. carriers like United Continental Holdings, Inc. UAL and most recently, Delta Air Lines, Inc. DAL too increased their respective baggage fees on operations across the United States. Also, each carrier has hiked its bag fee by the same amount and followed the same structure. However, carriers like JetBlue increased fees to change tickets. The carrier now charges $200 for changing or canceling a ticket priced above $200. Earlier, the charge was $150 for the same. However, passengers belonging to the highest fare class category are exempted from this renewed fee structure.

Each of the carriers mentioned above carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Following JetBlue’s footsteps, Canadian carriers like Air Canada and WestJet Airlines raised rates for bag checking in late August.

American Airlines Group Inc. Price

American Airlines Group Inc. Price | American Airlines Group Inc. Quote

ADVERTISEMENT

With crude oil prices persistently at a high level, it is not surprising that the airlines are trying hard to offset the impact by hiking checked bag fees. Adding to the woes are rising labor costs. Of late, airlines have been striking frequent labor contracts in a bid to satisfy employee needs. However, the move ended up in pushing up labor costs.

On the other hand, with several U.S. carriers raising baggage fees successively, the Congress is debating on whether the airline baggage and ticket change prices are “reasonable and proportional to the costs incurred by the air carrier.” If the existing fee structure is found unreasonable, the Congress will pass a provision to reauthorize the Federal Aviation Administration (FAA) for regulating the airlines’ current fee structure. The U.S. House of Representatives and the Senate have been holding sessions on getting a compromise bill passed by Sep 30.

Amid the controversy, American Airlines chairman and CEO Doug Parker has warned of not allowing customers to change nonrefundable tickets in case the FAA starts controlling airline fees pertaining to cancellation, change, baggage and other ancillary fees.

Notably, U.S. carriers generated approximately $2.9 billion in change fees last year with American Airlines contributing the maximum share.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
United Continental Holdings, Inc. (UAL) : Free Stock Analysis Report
 
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
 
JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
 
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.