Earlier this week, JetBlue became the first airline in the United States to increase checked bag fees in recent times. This is an area where JetBlue tends to “lead,” and there’s now an update, as one of the “big three” carriers has followed JetBlue’s lead.
In this post:
United tries to boost revenue with higher checked bag fees
Airlines are obviously in an incredibly tough spot at the moment. We’ve seen a massive increase in fuel costs, which is one of the biggest variable expenses that airlines have. If oil prices don’t decrease from these levels, even the world’s most profitable airlines will be losing money, while those airlines that were previously struggling may be in bankruptcy.
For tickets purchased as of today (Friday, April 3, 2026), United has increased checked bag fees by $10 for the first and second bag, and by $50 for the third bag and beyond. United’s checked bag fees vary based on whether you pre-pay for them 24 hours or more before departure, or whether you pay within 24 hours.
With this change, if you pay within 24 hours of departure, you’ll pay $50 for your first checked bag ($40 before), $60 for your second checked bag ($50 before), and $200 for your third checked bag ($150 before). Meanwhile if you pre-pay, you’ll get $5 off those amounts.
In a statement, United emphasizes that this is the first time in two years that the airline has raised checked bag fees.
Why United is raising checked bag fees instead of fares
In recent weeks, we’ve heard a lot of airline executives warn that airfare could go up due to higher oil prices. The issue is that demand for airfare is pretty elastic — when airfare goes up, demand goes down.
Even beyond that, Americans are feeling the impacts of higher oil prices, so many people also have less disposable income (though the “premium” airlines love to boast about the wonders of the K-shaped economy). If airlines could just easily raise prices, we wouldn’t be in a situation where most US carriers are turning operating losses.
From the perspective of airlines, if they desperately need to extract more revenue from passengers, increasing checked bag fees is a logical place to start, since it’s not a detail that passengers compare quite as closely as just direct ticket costs.
So yeah, the price of oil is impacting checked bag fees, but that’s simply because it’s a more practical way to try to increase revenue, compared to outright raising fares.
Bottom line
United has just increased checked bag fees by $10-50 per flight. The increase is $10 for the first and second checked bag, and $50 for the third bag and beyond, and there’s still a $5 discount for paying more than 24 hours in advance.
Airlines see raising checked bag fees as the easiest way to boost revenue without having to increase fares. JetBlue started this round of bag fee increases, United quickly followed, and I’m sure other airlines won’t be too far behind. And remember, once costs go up, they rarely come down.
What do you make of United increasing checked bag fees?
United has essentially made their basic economy worthless for most people since they won’t let you bring a carry on and you have to check it. Might as well just buy up and get the flexibility on your ticket and carry on included.
Of course, UA is the first of the big 4 to raise baggage fees. Fares have already been increased across the board and there are limits to how much fares can increase.
UA was the first of the big 4 and one of the first US airlines to talk about the impact on UA of higher oil costs - which could add $11 billion to UA's costs at $175/bbl oil. Problem for UA's calculations is...
Of course, UA is the first of the big 4 to raise baggage fees. Fares have already been increased across the board and there are limits to how much fares can increase.
UA was the first of the big 4 and one of the first US airlines to talk about the impact on UA of higher oil costs - which could add $11 billion to UA's costs at $175/bbl oil. Problem for UA's calculations is that jet fuel is way more costly than $175/bbl because of the very jet fuel crack spread which is about as high as the cost of crude; Argus calculated the simple average for US crude at major ports as $4.88/gal - $2/gal higher than just 2 months ago.
UA has long had the highest fuel cost per gallon due to its large presence on the west coast and the gap is even wider now because of the closure of refineries and pipelines on the west coast. AS is also facing massively rising jet fuel prices; they get about 20% of their total jet fuel needs from SIN which is seeing some of the highest jet fuel prices in the world because it is dependent on crude coming through the Strait of Hormuz.
A number of Asian and European airlines are putting together plans to cut capacity not just because high prices will destroy demand - even though Scott Kirby said that demand would remain constant at higher fuel costs - but because jet fuel shortages are likely in Europe and Asia. Diesel prices have soared as well and is far more important to the global economy than jet fuel.
this is an absolute economic disaster for nearly all airlines except for one with operational meltdowns possible by summer.
All it was going to take to undo UA's rah-rah "we are great" growth plan was one black swan event that would disproportionately impact UA.
We are in that black swan event right now and it will get much worse before it gets better.
UA's "$11 Billion" in extra costs projection was based on oil hitting $175 per barrel - which it isn't - and STAYING at $175 per barrel - which is unlikely. $4.88/gal currently is not coming off $175/barrel oil.
And despite Delta's ability to produce jet fuel from their refinery, the leveraged advantage does not magically create OIL at a cheaper price. Delta still has to buy oil on the open market - Delta's advantage is...
UA's "$11 Billion" in extra costs projection was based on oil hitting $175 per barrel - which it isn't - and STAYING at $175 per barrel - which is unlikely. $4.88/gal currently is not coming off $175/barrel oil.
And despite Delta's ability to produce jet fuel from their refinery, the leveraged advantage does not magically create OIL at a cheaper price. Delta still has to buy oil on the open market - Delta's advantage is taking out the middle man in production, i.e. turning the oil into jet fuel. Delta will get to share in the higher costs / lower profit margins if oil climbed to, and stayed at, $175 per barrel. Besides, Delta cannot produce 100% of their jet fuel. They still have to buy the vast majority of fuel from other producers.
When United posts quarterly and annual earnings for 2026, and still has a good year instead of a great year, your post will be fun to remind you about.
first, feel free to argue whether UA will pay $5 billion or $11 billion more in fuel costs; the numbers are only a matter of scale. There will be massive damage to the global airline industry and it is already happening and will only accelerate.
DL is getting a cost advantage NOW from the refinery and it is because it owns part of the means of jet fuel production which also produces other refined products....
first, feel free to argue whether UA will pay $5 billion or $11 billion more in fuel costs; the numbers are only a matter of scale. There will be massive damage to the global airline industry and it is already happening and will only accelerate.
DL is getting a cost advantage NOW from the refinery and it is because it owns part of the means of jet fuel production which also produces other refined products. Of course, DL's fuel costs will increase but you simply cannot w/ a straight face deny that DL is enjoying some massive reductions in the cost of jet fuel not only because the refinery produces jet fuel at lower costs than the market from which other airlines have to buy it but also because refineries and esp. the DL refinery become much more profitable when there is a huge crack spread which exists now not just for jet fuel but also for diesel.
DL does produce directly or indirectly through product swaps 75% of its jet fuel requirements. The refinery saved DL $777 million or 23 cents/gallon in 2022 and half that amount in 2023 even w/ the refinery offline for part of the year.
There isn't a global petroleum analyst that believes that jet fuel prices will come back down even if the Strait is reopened tomorrow. This crisis is easily an 18 month or longer cost crisis - and UA, whether you want to admit it or not - is far more deeply exposed than any other airline except for perhaps AS.
Let's also not forget that UA has labor settlements that should close in 2026 which will increase costs and also has far higher capex than any other airline; their cash flow will dramatically slow as costs increase and they will have no choice but to take on debt. Airbus and Boeing are not deferring airplanes over the next 2 years.
This crisis could easily push some airlines into chapter 11 - even if that isn't an immediate risk for UA.
The article and comments to bring back up are the ones talking about how cool UA is and how some are convinced it is leading the industry.
None of that matters in the face of huge cost increases that will result in demand destruction as fares and fees are increased and service is cut.
UA's business plan was always high risk and high reward would only come if everything went right. On top of multiple other things happening uniquely to UA, massively higher fuel costs are a black swan event for UA.
Let's do wait for first quarter earnings and guidance which starts with DL next week and will be complete in a month for the US industry and a bit longer for other airlines worldwide.
Your optimism about how well UA will handle this is severely misplaced while your inability to accept that DL has a massive cost advantage that it will use just as much if not more than UA used its post covid strategy to its advantage.
I can only imagine how many hundreds of millions of dollars airlines pay for fuel every month. It's going to be interesting to see if the low cost carriers can survive this.
each of the big 3 US legacies (AA, DL and UA) said that fuel costs increased $400 million in the 1st quarter and the war started at the end of February - so only one month before the end of the quarter.
UA said that the impact would be $11 billion/year.
Delta also said that its refinery would begin to kick in benefits to DL's fuel costs in the 2nd quarter (which we are...
each of the big 3 US legacies (AA, DL and UA) said that fuel costs increased $400 million in the 1st quarter and the war started at the end of February - so only one month before the end of the quarter.
UA said that the impact would be $11 billion/year.
Delta also said that its refinery would begin to kick in benefits to DL's fuel costs in the 2nd quarter (which we are now in). DL's refinery delivers benefits when the jet fuel crack spread is high and we are in precisely that condition now. The refinery saved DL $777 million in 2022 and another $385 million in 2023 - and the refinery was offline for 3 months in 2023 due to maintenance. The price of diesel is also soaring and a barrel of light sweet crude can typically produce more diesel than jet fuel.
Most of the industry except DL has few options other than cut capacity to deal w/ higher fuel costs.
As it was designed to do, the refinery will lower the rate of increase of DL's fuel bill and that is already happening and will only accelerate given that the Strait is nowhere near close to reopening.
A $ 1 billion plus fuel cost savings by one airline compared to its peers is going to have huge competitive impacts.
But wait. United is the cool airline nowadays that only does cool nowadays things.
If this was logical, then the next step would be to charge a supplement based on passenger weight. There would be some initial outcry about rights etc but lawyers would take care of this inconvenience. If your weight was above the average, then you would pay an extra amount based on a sliding scale fee. Americans, being on average heavy, would suffer substantially when flying on European carriers. Instead of weighing your bags, the airline...
If this was logical, then the next step would be to charge a supplement based on passenger weight. There would be some initial outcry about rights etc but lawyers would take care of this inconvenience. If your weight was above the average, then you would pay an extra amount based on a sliding scale fee. Americans, being on average heavy, would suffer substantially when flying on European carriers. Instead of weighing your bags, the airline would weigh you. It is of course a money grab that, like income taxes, will not be temporary.
We're at the threshold of a global oil shock and economic recession if not worse. Blame the US.
It's funny how everything goes up in price, but people seem to think oil has to somehow stay permanently down.
Also, will United reduce bag fees if oil does go down in price? I'm guessing no.
Same can be said about the price of airline tickets.
It’s the ONLY consumer product that hasn’t gone DOWN vs inflation over the last 20 years.
That's just not true. Next month I'm flying across Europe twice - a direct flight of over 1600 miles then a few days later flying with a connection for a total distance of just under 2.5k miles. All three flights are in business class and the tickets include 64kg of luggage, priority security, lounge access, hot meals, alcohol etc. Total cost: €554, which on an inflation-adjusted basis corresponds to €360 in 2006... when many airlines...
That's just not true. Next month I'm flying across Europe twice - a direct flight of over 1600 miles then a few days later flying with a connection for a total distance of just under 2.5k miles. All three flights are in business class and the tickets include 64kg of luggage, priority security, lounge access, hot meals, alcohol etc. Total cost: €554, which on an inflation-adjusted basis corresponds to €360 in 2006... when many airlines wouldn't even sell you an one-way in Y for much less than full fare (€500 or so).
Baggage fees are the following the resort fee playbook in terms of obfuscating total costs