Delta to charge international fliers $50 for second checked bag
Delta Air Lines Inc., the world’s largest carrier and one of the busiest at Los Angeles International Airport, will begin charging international passengers a $50 fee to check a second bag.
The fee, the first on overseas flights by a major U.S. airline, was announced as the Atlanta-based carrier reported that it lost $794 million in the first quarter, mostly because of losses from hedging on fuel prices. In the year-earlier quarter, the airline lost $6.39 billion when it took an accounting charge of $6.1 billion.
Revenue for the quarter fell 15% to $6.68 billion as the airline cut flights amid a general slide in air travel. The latest results included the operations of Northwest Airlines, which merged with Delta last fall.
Separately, United Airlines, the second-busiest carrier at LAX, said losses for the first quarter narrowed to $382 million compared with a loss of $549 million a year earlier. Revenue fell 22% to $3.69 billion.
The quarterly losses by Delta and United were in line with the results of the airline industry, which has been hit with the worst downturn in travel since the Sept. 11, 2001, terrorist attacks.
But the losses were less than expected, and shares of Delta and United surged Tuesday. Delta climbed nearly 20% to $8.11, and United rose 13% to $6.63 a share.
The checked-baggage fee, effective for international flights beginning July 1, marks the latest move by U.S. carriers to boost revenues amid slumping travel, particularly among business customers.
Delta and many other big airlines last year began charging domestic travelers fees for checked bags, typically $15 for the first and $25 for the second.
Certain Delta frequent fliers and active military will be exempt from the new fee for international passengers. There is no fee for the first checked bag on international flights.
The airline said the new fee was expected to generate more than $100 million in additional revenue annually.
United executives in a conference call with analysts Tuesday said they could not say whether the airline would match the fee, but added that it was the “right way to go” and that the airline was a “believer in unbundling,” or a way to charge for services that in the past were included in the base airfare.
In addition to fees, Delta executives suggested in their conference call with analysts that airlines might start to hike fares again. Carriers, including Delta, have been slashing fares for spring travel as cuts in flights have not kept up with falling demand.
“We’re seeing some signs of stabilization as the revenue environment appears to have bottomed out,” said Delta Chief Executive Richard Anderson. “But it’s still too early to call, and we expect significant head winds in the rest of 2009.”
Although there may be some improvements on some domestic routes, the slump has spread overseas and has been hurting international travel.
British Airways briefly had a sale Tuesday with a round-trip ticket from LAX to London for as low as $449, including taxes, fees and fuel charges, for flights on certain days during the peak summer travel season. The lowest fare available on other airlines was $839 round trip.
But the sale lasted for only about 15 hours, according to travel website Bestfares.com.
“We’re going to see more of these one-day distress sales,” said Tom Parsons, editor of Bestfares.com. “Have your credit card ready, because they don’t stay around for long.”