Checked bag fees are here to stay: United Airlines CEO

Thu Jul 30, 2015 6:24pm EDT
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By Jeffrey Dastin

NEW YORK (Reuters) - Still hoping for the day airlines let all customers check bags and make reservation changes for free?

Forget it, said United Continental Holdings Inc's (UAL.N: Quote) Chief Executive Jeff Smisek at an industry lunch on Thursday, defending airlines even as they reap billions in profit and face federal probes into pricing practices.

Some travelers are "having difficulty recognizing that we're now a business," Smisek told attendees, recalling the bankruptcies and mergers that reshaped the loss-making industry in the decade after the attacks of Sept. 11, 2001.

"They criticize us if we charge for more legroom. Let me tell you though: that's what businesses do."

Smisek, who took the helm of the merged United and Continental in 2010, said customers should not expect services such as checked bags to be bundled cheaply into airfares, as they were in the past, but priced on a sliding scale as extras, as in other industries.

"If you want more data on your data plan so you can watch faster, better cat videos, you call AT&T, and they're happy to increase your data plan," said Smisek. "And they charge you for it. That's what businesses do."

Smisek's comments come at a sensitive time for airlines.

Last week, the U.S. Transportation Department opened an investigation into whether airlines gouged prices to take advantage of a train-service closure.   Continued...

Jeff Smisek, Chairman, President and Chief Executive Officer of Continental speaks during a news conference announcing the merger between Continental and United Airlines in New York, May 3, 2010.  REUTERS/Shannon Stapleton