Beginning in May, Delta Air Lines 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. Last month United Airlines became the first domestic legacy carrier to initiate a $25 fee for a second bag, and within weeks US Airways 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.
Today at the JP Morgan aviation conference United executive vice president and CFO Jake Brace 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 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."
