Continental to charge $15 first-bag fee starting March 1

Sep 06, 2008 (Houston Chronicle - McClatchy-Tribune News Service via COMTEX) -- CAL | Quote | Chart | News | PowerRating -- Sep. 6--Citing continued high fuel prices, Continental Airlines said Friday it will join most of its competitors and charge many economy-class customers $15 each way for their first checked bag.

The Houston-based carrier, like most other major U.S. airlines, already is charging $25 each way for second bags checked by most economy customers on nonrefundable domestic flights. The new fee took effect for tickets bought as of Friday for travel Oct. 7 and beyond.

"Obviously, it is being done other places, and it is working, so they are piling on," CreditSights analyst Roger King said. "Airlines have not been able to raise fares in any meaningful ways. That is why they are resorting to these crazy fees."

Some passengers at George Bush Intercontinental Airport took issue with the move.

Continental customer Simon Hogan, on his way back to his home near San Francisco after a business trip to Houston, said the fees should be included in the ticket.

"I don't think it is a good idea at all," Hogan said Friday. "It should be incorporated into the fare."

Continental won't charge the fee to elite-level frequent fliers or to customers traveling on full-fare refundable tickets. Continental also said it won't charge military personnel and their families traveling on official orders.

The fee is for travel in the United States and Puerto Rico, the U.S. Virgin Islands and Canada.

Continental CEO Larry Kellner had said during the summer that the airline was studying how the fees worked at other carriers before deciding what to do.

Kellner told employees in a taped message Friday that Continental would have preferred not to implement the fee.

"Given the current environment, we are losing our competitive stance with other carriers," he said on the recording. "So we think this is the right thing to do for Continental."

Dallas-based Southwest Airlines still allows two free checked bags, in stark contrast to the rest of the industry.

That wasn't lost on Continental passenger Jim Simon, of Houston.

"I'm going to start flying Southwest," said Simon, who was heading from Houston to Denver on Friday. "I'd consider it."

Delta Air Lines doesn't charge for a first checked bag, but charges $50 each way for a second.

"Delta customers continue to enjoy the service of a first checked bag at no charge," spokesman Anthony Black said in an e-mail. "There are no changes to our policies."

However, CreditSights' King said he expects Delta to follow its rivals in putting the fee in place.

American Airlines, the world's biggest airline, in June became the first U.S. carrier to implement the fee.

Continental spokesman Julie King said the airline thought it would see more of a market shift away from other carriers by not having the fee, but didn't.

Kellner told employees the same thing in his taped message.

"So we feel it is the right competitive move," King said.

Arizona resident Victor Uzarraga, whose printing product sales territory includes Texas, said he tries to use only carry-on luggage but still disagreed with the new fee.

"I think it is a little ridiculous because of what they do charge for a flight," he said.

But Uzarraga of Tucson, who travels about three weeks every month, said flying Continental is better than US Airways, which now charges for nonalcoholic drinks.

Shares of Continental rose 11 cents Friday, closing at $18.06 in trading on the New York Stock Exchange.

bill.hensel@chron.com

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