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American to charge for all checked bags

08:00 PM CDT on Wednesday, May 21, 2008

By BRAD HAWKINS / WFAA-TV

FORT WORTH — American Airlines, hit hard by escalating fuel prices, said Wednesday passengers will be hit with fees to check any bag, starting with tickets purchased after June 15.

Houston fliers said they are frustrated by American's plans

American and its American Eagle subsidiary will also trim their fleets, cut their flight schedules and lay off workers in the coming months.

Speaking at the annual meeting of AMR Corporation, the parent company of both airlines, chairman, president and CEO Gerard Arpey said travelers would face a $15 charge for the first piece of luggage checked, the first time any major domestic airline has used this method to increase revenue.

Delta doesn't plan to match American's fee for the first checked bag, airline spokeswoman Betsy Talton said.

"These are difficult but necessary steps," Arpey said, noting that rising oil prices have inflated the airline's annual fuel costs by nearly $3 billiion since the start of the year.

American recently instituted a $25 fee for second bags checked after a free first bag. Arpey said other passenger fees will be increased, including surcharges for pets and for unaccompanied minors.

Also on Wednesday, Arpey said AMR planned to cut its domestic capacity by up to 12 percent by retiring 40 to 45 American Airlines jets and 30 to 35 American Eagle aircraft starting in the fourth quarter. Some of the planes will be retired; others will be parked at a desert storage facility.

Arpey said fewer flights will lead to job cuts at both American and American Eagle. The number of workers facing layoffs was not announced.

AMR shares tumbled $1.10, or 13.4 percent, to $7.10 after the announcement which came as its shareholders gathered for their annual meeting.

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