U.S. airlines collected $566 million in baggage fees in the first three months of 2009, up from $123 million in the same period last year, an increase of over 360 percent, according to the U.S. Transportation Department (DOT).

That rate of increase is expected to grow even higher when DOT tallies up the amount of so-called “a la carte” or ancillary fees that the U.S. air carriers charged for baggage and other items during the second quarter of 2009.

Leading the pack of U.S. air carriers relying more on ancillary fees in the face of dwindling revenue streams is American Airlines. Having just recently raised checked luggage fees for domestic passengers, American has now implemented revisions to its baggage policy for many of its international flights. Not to be outdone, Virgin America has also joined the higher fee bandwagon.

American’s revised policy takes effect for tickets purchased on or after Sept. 14, 2009. The changes apply to flight operated by American for travel to, from or through India, Belgium, England, France, Germany, Ireland, Italy, Spain and Switzerland.

Customers who purchase certain economy class tickets on or after the effective date will be able to check one bag for free and will pay $50 for a second checked bag.

As with its domestic bag fee hike, certain favored passengers on the aforementioned international flights won’t pay any checked bag fees, including American's AAdvantage frequent flyer program members who have achieved Gold, Platinum and Executive Platinum levels, as well as Oneworld Alliance Emerald, Sapphire or Ruby members.

And those who fly in the First and Business Class cabins, as well as those who purchase full-fare tickets in the Economy Class cabin also escape the new bag check fees. American is also giving a fee dispensation to active duty U.S. military personnel traveling on orders or personal travel and dependents of active duty service personnel on official travel.

A month ago, both American and Continental announced they were hiking, by $5, the fees they charge to check a first and second bag on domestic flights in a move to make up for second quarter losses. The first checked bag now costs $20 and the charge for a second bag went up to $30. Continental, on the other hand, increased its domestic checked baggage fees by $5 for customers who do not prepay those fees online---to $20 for the first bag, $30 for the second.

Meanwhile, Virgin America has announced that for travel starting on or after September 10, the checked baggage fee is a flat $20 (excluding the first and second bag for First Class travelers; and the first bag for Main Cabin Select and refundable fare travelers.) Previously, the new airline entrant’s fee was $15 for such checked items. (Virgin America did say it was maintaining its “generous” first bag weight limit–up to 70 lbs.)

American Airlines collected $108 million in baggage fees during the first quarter of 2009, the most of any rival U.S. airline. Last year, the airline brought in only $33 million in luggage fees in the first three months. Fees are becoming an increasingly important source of revenue, and America Air can be expected to maintain its lead in assessing ancillary fees.

Southwest Airlines is the only major U.S. carrier that still allows each passenger two free bags. Stubbornly maintaining its “bags fly free” marketing scheme, it’s clear that the discount air carrier is losing hundreds of millions in potential revenue.

Southwest did recently implement a fee for babysitting unaccompanied children and started allowing (and charging) for dogs and cats in the cabin, but it has stopped short of charging for checked luggage. Airline analysts believe it is only a matter of time before Southwest joins its competitors in implementing checked baggage fees.

But the chairman of the U.S. House Transportation and Infrastructure Committee is taking aim at “a la carte" fees, calling for a government study on whether such charges are excessive.

Rep. James Oberstar (D-MN) urged the Government Accountability Office (GAO) to look into the practice of imposing charges for checked baggage and onboard meals, ticket cancellation penalties and seat-selection fees.

He wants the investigative arm of the U.S. Congress to look into whether such charges are "commensurate with the cost of providing those services to passengers. We are concerned that these fees may be excessive and that they are resulting in revenue being diverted from the Airport and Airway Trust Fund," Oberstar wrote in a letter to the GAO.

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