Delta To Join In Second Bag Charge

MARCH 18, 2008 -- Delta Air Lines beginning in May plans to join United Airlines and US Airways in charging passengers for a second checked bag, Delta president and CFO Ed Bastian told investors at a JP Morgan aviation conference in New York this morning.

Bastian said the carrier would charge $25 for a second checked piece of luggage, but did not give further information about which customers or which routes the initiative would impact. United Airlines last month became the first domestic legacy carrier to initiate a $25 fee for a second bag (BTNonline, Feb. 4) and US Airways within weeks joined the carrier in a similar initiative. However, both United and US Airways have shielded certain customer segments, particularly elite frequent flyers, from such fees.

United executive vice president and CFO Jake Brace today at the JP Morgan aviation conference said the carrier sees more opportunity for further unbundling and envisions implementing more a la carte pricing options for passengers.

Brace said the second bag fee could yield $100 million in additional revenue for the carrier in 2008, particularly if matched industry-wide. He said other such initiatives are in the pipeline, claiming that unbundling and merchandizing options could generate more than $1 billion for United within five years.

Meanwhile, Delta's Bastian today kept consolidation comments to a minimum, noting Delta's board remains engaged in exploring options. Bastian would not take questions on merger activity, but claimed, "We are proponents of consolidation, but it does have to be the right deal."