More carriers pile on fees for first bag

United, US Airways match American with the charge. UAL's shareholder meeting draws protesters.

June 13, 2008|Peter Pae | Times Staff Writer

United Airlines said Thursday that it would begin charging $15 for the first piece of checked luggage, becoming the second major U.S. airline to impose a fee for a service that has long been included in the fare.

The luggage charge for coach-class passengers on the nation's second-largest carrier was quickly matched by US Airways, raising the prospect that the other two big carriers, Delta Air Lines and Continental Airlines, would follow suit.

Southwest Airlines is the only carrier that has publicly balked at -- and ridiculed -- the fee.

No. 1 carrier American Airlines initiated the controversial charge last month, citing the need to generate extra revenue to help offset the fast-rising cost of fuel.

American will begin adding the fee Sunday on tickets purchased for domestic flights. United's fee will apply to tickets purchased starting today for travel Aug. 18 and after.

US Airways said its luggage fee would be imposed on tickets purchased beginning July 9. It also will start charging $2 for sodas, juices, bottled water and coffee in coach Aug. 1, when it also will raise the price for alcoholic beverages.

Tempe, Ariz.-based US Airways said it planned to eliminate 1,700 jobs and slash domestic seating capacity by up to 8% by year's end.

Meanwhile, about 100 United Airlines pilots, flight attendants and machinists protested Thursday in Woodland Hills, where the annual shareholders' meeting of United parent UAL Corp. was being held. The protesters decried the way senior executives were managing the airline, saying it has led to sinking employee morale.

United, which has the second-most flights at Los Angeles International Airport, has one of the worst on-time records of any U.S. major carrier and often ranks among the lowest in consumer satisfaction surveys.

Several union leaders said the airline's service had suffered because employees were upset, particularly at a decision approved Thursday to set aside stock worth about $130 million to fund a new incentive plan for executives just as a plan to slash its payroll by up to 1,600 workers was being announced. Last week, the airline said it would ground 100 planes to cope with mounting losses from escalating fuel expenses.

"The management's mantra has been 'shared sacrifice, shared rewards.' We've sacrificed, but it seems executives are the only one getting the rewards," said Todd Daniels, a United pilot for 18 years and co-chairman of communications for the Air Line Pilots Assn.

United spokeswoman Jean Medina said the incentives for upper-management personnel were needed to help the airline "attract, retain and reward exceptional senior leaders."

But Daniels said pay and benefits for pilots had been slashed by half since 2003, just before the airline filed for bankruptcy.

Pilots gave up a total of $1.4 billion in compensation during the Chapter 11 reorganization to keep the airline from going out of business, he said.

In a park across from where the meeting was being held, the United protesters illustrated their grievance by inflating a 15-foot-tall black rat holding two large bags of money.

They also carried signs saying "Glenn's gotta go," a reference to Chief Executive Glenn Tilton, outside the Warner Center Marriott hotel.

Tensions between senior managers and the airline's unions have grown in recent weeks, particularly after Continental Airlines' top two executives said last week that they would forgo pay for the rest of this year because of the workforce cuts that the airline is being forced to make.

The pilots union also questioned UAL's decision to hold its annual meeting so far from its headquarters in Chicago, where protesters disrupted last year's meeting. Medina said the airline chose a Southern California location because it could not find a place in Chicago.

"One can conjecture as to why they would move a meeting of a Chicago company to Woodland Hills, but one can guess that they didn't want a repeat of last year," said Daniels of the pilots union.

Speaking at United's shareholders meeting, which at times included testy exchanges between Tilton and dozens of airline workers, Tilton defended the executive incentive plan and called escalating fuel prices a "game changer" for the industry.

"The magnitude of the current economic reality requires action far greater than any one in the industry could have anticipated just a few months ago," Tilton told stockholders.

Separately Thursday, Continental said it would end service to 15 cities worldwide, including Palm Springs, Oakland and Reno, to pare costs.

No cuts in service are planned for LAX, where Continental has 23 departures a day, most of them to Houston and Newark, N.J.


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