American Airlines breaks new ground with bag fee

By John Crawley

WASHINGTON (Reuters) - American Airlines broke new ground on Wednesday by announcing it will with some exceptions begin charging passengers for all checked bags, a move that experts said would likely be adopted by at least some rivals to help counter surging fuel prices.

American, a unit of AMR Corp, becomes the first to impose a fee, $15, for the first bag and upped existing luggage charges so a passenger who checks two bags in mid-June would pay $80 round trip. That figure is in the vicinity of some bargain fares the carrier offers.

"Put yourself in the bag," joked fare guru Terry Trippler on what passengers can do to save money on travel costs.

American's fee for checked bags will not apply to international flights, some of its loyalty members, or people with full-fare tickets.

Trippler called the change inevitable as airlines try to stem potentially crippling financial losses from record fuel prices and other operating costs that have risen unabated this year.

"When people say they are 'nickel and diming,' I disagree. This is survival," Trippler said. "They need to do what they can."

Domestic airlines fly 600 million people annually and passengers check more than 1.2 billion bags per year, according to government figures.

American did not disclose its share of that total but said it hoped to raise "several hundred million dollars" from the luggage fee and new charges for other services.