American Airlines and Continental Airlines are raising, 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 reported last week.

For American, the checked bag fee will increase for domestic travel tickets that are purchased on or after Aug. 14, 2009. The fee changes apply for travel within the United States and U.S. territories such as Puerto Rico and the U.S. Virgin Islands. The higher checked luggage charge also applies to travelers on American's regional affiliate, American Eagle.

For tickets purchased on or after the effective date, the first checked bag will be $20 and the charge for a second checked bag will be $30, up from the current charges of $15 and $25, respectively. The checked bag charges to and from Canada are not changing at this time.

Certain favored passengers on American domestic flights don’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 domestic bag check fees. Travelers on American’s international flights remain exempt from the bag handling charges at least for now.

In reporting a second quarter 2009 net loss of $213 million, Continental implemented several measures to raise $100 million in cash and reduce costs including:

• Eliminating 1,700 positions across the company, including management and clerical positions. This is in addition to the previously announced elimination of 500 reservation agent positions and leaves of absence extended to 700 flight attendants. Continental is offering employees voluntary programs to minimize the number of involuntary furloughs and reductions in force. The 1,700 job cuts amount to about 3.4 percent of Continental’s workforce.

• Increasing 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. This change is effective immediately for travel Aug. 19, 2009, and beyond.

• Increasing the telephone reservation booking service fee by $5 effective immediately.

As the cost of checking luggage at the two airlines goes up, the domestic air fares charged by U.S. air carriers dropped 9.1 percent in the first quarter of 2009 from the fourth quarter of 2008, the biggest quarter-to-quarter drop on record, according to newly-released data from U.S. Department of Transportation.

The $315 average first-quarter fares were down 5.9 percent from the first quarter of 2008 and down 12.5 percent from the record high average fares of $360 in the third quarter of 2008.

Of the top 100 U.S. airports, the highest first-quarter 2009 average fares were in Huntsville, AL followed by Cincinnati, OH; Grand Rapids, MI; Savannah, GA; and Des Moines, IA. The lowest fares among those same airports were at Long Beach, CA followed by Oakland, CA; Burbank, CA; Dallas Love and Las Vegas.

The largest year-to-year average fare increase for the 2009 first quarter among the 100 largest American airports ranked by originating passengers was: 10 percent in Dallas Love followed by Houston Hobby; Lubbock, TX; Oklahoma City, OK and Memphis, TN. The biggest year-to-year average fare decrease was 16.8 percent in Cincinnati, OH, followed by Madison, WI; Richmond, VA; Long Beach, CA and San Francisco.

DOT noted that low-cost carriers now transport about 40 percent of all domestic enplaned passengers, up from about 14 percent in 1995. Network carriers have been forced to match some of the low-cost carrier liberal fare rules, such as eliminating the “Saturday Night Stay Rule,” which has allowed more passengers to purchase lower fares. And use of the Internet allows almost instant price comparisons that give the customer the opportunity for unprecedented low-fare shopping.

And humans aren’t the only ones getting a price break on airfares. In the dog (and cat) days of summer, pet-friendly JetBlue Airways has announced a special 50 percent discount on the airline's standard JetPaws pet fee of $100 each way for four-legged customers in September.

To receive the discount, flights must be booked during August for travel between Sept 1, 2009 and Sept 30, 2009). A special promotional code can be obtained at PETCO pet stores.

JetPaws is JetBlue's in-cabin small pet transportation program. As part of the program, customers receive two bonus award points for each flight through JetBlue's TrueBlue customer loyalty program, helping two-legged customers earn free travel faster when traveling with Fido or Fluffy.

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