Even one checked bag may cost you

Flying coach? Be prepared to pay for almost anything extra beyond sitting in your seat.

That's the message American Airlines appeared to send Wednesday when it announced that many of its passengers will have to start paying a $15 fee to check a bag on domestic flights. The move could be matched by other big carriers.

"It's just another in a long line of the fee hell that we are being put through," said Rick Seaney, CEO of www.farecompare.com. With oil prices soaring, all carriers are asking: "What can I do to raise revenue to stay alive?" he added.

American also said that it will slash its domestic schedule by 11 to 12 percent in the fall.

Northwest Airlines, which said last month that its domestic operations would shrink by 12.6 percent in the fourth quarter, is expected to make even deeper cuts. In April, it said it would reduce its fleet by 15 to 20 planes.

"We have no choice but to look at additional capacity reductions," said Tammy Lee, vice president of corporate communications for Eagan-based Northwest. "Those will be further detailed in the coming weeks."

Lee did not estimate how many additional seats that Northwest would take off of the market, but she said that every dollar increase in the price of a barrel of oil costs the airline an extra $42 million a year.

"With oil blowing by $130 a barrel, all airlines must pare unprofitable or marginal flying where they can, while still maintaining enough flights to support a complete network," Lee said.

Oil rose above $135 a barrel Wednesday -- a new record and double the price of oil a year ago. J.P. Morgan Chase has projected that the airline industry will lose $7.2 billion this year.

David Stempler, president of the Air Travelers Association, said the capacity cuts will reduce flight options for passengers, but the airlines have no choice but to streamline their operations to remain afloat.

"There are not many business models that can be successful at these [oil] levels," Stempler said. Many airlines crafted 2008 business plans that included assumptions of oil prices in the $85- to $90-a-barrel range.

Now airlines like American are trying to make up for those increased expenses with higher fares and new and bigger fees. Also Wednesday, American said that it would charge higher fees for a variety of services, including reservation services and oversized bags. Many of the increases are in the $5 to $50 range. For example, the fee for an overweight bag is rising from $100 to $150.

"If you want to check a bag, eat a meal, watch a movie or have a cocktail, you will pay for it," said Terry Trippler, a Minneapolis-based travel expert. Airlines prefer such a la carte pricing, since it affects only users of those particular services, he noted.

In American's case, he said the new fee for the first checked bag is not surprising when one looks at American's fuel costs. In 2000, Trippler said, American paid an average of $24 in fuel costs to transport a passenger per flight. Now, that cost has risen to $82 per passenger.

Trippler said he would not be shocked to see the airlines start charging for sodas in coach.

"What is killing the airlines is the rule that the price you pay when you buy is the price you pay when you fly," he said. So the airlines are taking losses on tickets booked three months ago, because those fares don't reflect today's higher fuel costs. Trippler said the airlines could institute new rules that would allow them to tack on more fuel surcharges just hours before flight departures.

Recently, major airlines started charging $25 for a second checked bag.

On Wednesday, no carriers immediately matched American's new bag fee of $15 for the first checked bag, but several are studying the option.

Lee said that Northwest is reviewing American's fee but has not decided yet whether to match it.

Mendota Heights-based Sun Country Airlines recently introduced and raised several fees for its passengers. Sun Country CEO Stan Gadek said, "We are evaluating American's initiative and are considering a number of ways to offset the high cost of fuel."

Stempler said a lot of passengers will be irritated by American's new bag fee, but added that it's part of the airlines' strategy to survive an unprecedented period of high fuel prices.

"As much as we dislike all of this fee-for-service activity, I think it is an inevitable part of what is happening in the industry," he said.

Liz Fedor • 612-673-7709

OIL SKYROCKETS TO $135

• Crude futures leaped $5 a barrel, and there's no end in sight. D1

• What does the bag policy mean for traveler safety? Weigh in at startribune.com/escapeartist.