American Airlines hikes luggage charge - How much airlines made off of checked bags in 2023
We took a look at the billions airlines charge yearly for checked bags after American Airlines raised its checked luggage pricing.
TheStreet's J.D. Durkin brings the latest business headlines from the floor of the New York Stock Exchange as markets close for trading Tuesday, February 20.
Full Video Transcript Below:
I’m J.D. Durkin - reporting from the New York Stock Exchange. Stocks were in the red to close out today's session. The Dow closed down over 60 points, the Nasdaq closed down almost a full percent, and the S&P closed six-tenths of a percent lower. This comes as investors anxiously await NVIDIA earnings which are due out Wednesday after the closing bell… NVIDIA is the third-largest company by market share, so this report could sway markets pretty significantly.
Investors are also looking out for minutes from the Federal Reserve’s January meeting for hints into the future of interest rate cuts. Markets are currently pricing in an 8.5 percent chance of a rate cut in March.
In other news - American Airlines is raising its price to check luggage. Until now, passengers paid $30 for their first checked bag on domestic flights. With the change, passengers who book a checked bag in advance online will pay $35, while checking one at the airport will cost $40. A second checked bag will now cost $45, whether it's booked in advance or at check-in.
American Airlines last raised its baggage fees in 2018 - but the company says the cost of transporting bags has increased significantly over the past few years, with fuel prices playing a big role. In addition to the price hikes, the company also announced it would be scaling back which tickets purchased through third-party sites would be eligible for frequent flier miles.
According to the Department of Transportation, in the first nine months of 2023, U.S. airlines brought in $5.5 billion from baggage fees, a 9 percent year-over-year increase. American brought in $1 billion alone - however, it is not the only airline to have recently raised its baggage fees. Both Alaska Airlines and JetBlue have already raised prices in 2024.
That’ll do it for your daily briefing. From the New York Stock Exchange, I’m J.D. Durkin with TheStreet.
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