Bill would scrap checked baggage fee

@CNNMoney November 22, 2011: 3:55 PM ET
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NEW YORK (CNNMoney) -- Fliers hate baggage fees, and the long lines at airport security screening that are made worse by passengers carrying on more bags than they did in the past.

So just before the the busiest air travel day of the year, Sen. Mary Landrieu has introduced legislation to try to put limits on airlines charging for checking in bags.

Landrieu, a Louisiana Democrat, has two different proposals. One would prohibit airlines from charging for the first checked bag.

The other would allow the fees, but raise taxes on airlines that charge for baggage. That proposal would raise the $260 million that the Transportation Security Administration estimates it needs to handle the extra carry-on bags going through the screening process.

The TSA estimates that the number of checked bags has decreased by 26% since 2009, while carry-on bags increased by 87 million in roughly the same time period.

"Many airlines consider checking a bag not to be a right, but a privilege -- and one with a hefty fee attached," said Landrieu. She said her first legislative proposal "will guarantee passengers one checked bag without the financial burden of paying a fee, or the headache of trying to fit everything into a carry-on."

The second, she added, would at least make sure taxpayers are made whole for the stresses more congestion at security places on the system.

Not surprisingly, the airline industry's trade group objects to both proposals.

The Air Transport Association says its own survey shows only one in four passengers now pay a baggage fee, either by carrying-on bags, choosing an airline that won't charge a fee or having the fee waived due to the credit card they use or the frequent flier perks they receive.

Southwest Airlines (LUV, Fortune 500) doesn't charge for bags and has made the lack of a fee part of its marketing campaign. Jet Blue (JBLU) doesn't have any fees on the first bag. On the other extreme, low-fare carrier Spirit Airlines (SAVE) charges even for carry-on bags.

"Customers do have choice today," said Steve Lott, spokesman for the association. "In terms of fairness, you pay for the services you get. Under what the senator is suggesting, some people would be paying for a service they aren't using."

Airline consultant Michael Boyd said he believes if the fees were banned, fares would rise instead. That could cost customers even more due to the excise tax they pay on fares and not on fees.

"I hate the fees like everyone else," said Boyd. "When American Airlines (AMR, Fortune 500) initiated a bag fee, I thought they were doomed. But the consumer didn't blink an eye, they just got out their wallet."

The U.S. Travel Association, a trade group representing hotels, rental car companies and others in travel and tourism, is backing Landrieu's proposal. It fears the baggage fees and the delays caused by screening extra carry-on bags are keeping people from making trips.

"We think that will improve the travel process," said Erik Hansen, director of domestic policy for the group. He points to a recent survey by his group that identified "people who bring too many carry-on bags through the security checkpoint" as the most common annoyance cited by fliers, cited by almost three out of four surveyed. The time it takes to clear security is No. 3 on the list, cited by two out of three.

Airlines collected $3.4 billion in baggage fees last year and are on pace to collect roughly the same amount this year, according to figures from the Transportation Department.

That money could be the difference between a profitable or money-losing year for the industry. The Air Transport Association estimates that U.S. passenger airlines have made only $900 million in the first nine months of the year.  To top of page

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