American Airlines pissed off the wrong Harvard Business School professor

Max Bazerman, a Harvard Business School professor whose areas of interest include business ethics and decision making, is suing American Airlines for refusing to honor a commitment to let certain frequent flyers check up to three bags at no charge.

In a lawsuit filed this week in US District Court in Boston, Bazerman is asking to be made lead plaintiff in a class action involving a total of more than $5 million in potential losses by him and similar American Airlines customers.

Bazerman says American Airlines promised him and other members of its "elite" frequent-flyer programs that they could check their bags at no charge when they purchased business- or first-class tickets, only to require them to then pay $25 a bag at check-in:

Even when tickets specifically provide that a first bag may be checked at no additional charge, AA systematically required passengers to pay to check their first bag.

For example, Mr. Bazerman received an e-ticket confirmation e-mail from AA that stated "1STCHECKED BAG FEE-PHXBOS-USD0.00." Yet, when Mr. Bazerman and his wife sought to check their bags after arriving at the airport, AA required Mr. Bazerman to pay $25 to check his first bag and $25 to check his wife's first bag.

Bazerman cited similar complaints by other American customers on Twitter in recent months, and charges American Airlines is breaking its contract with customers to benefit its bottom line:

In 2016, AA collected approximately $1.117 billion in revenue from checked bag fees, which was over 28% higher than the airline with the second highest revenue from checked bag fees. One way AA increases the revenue it receives from checked bag fees is to systematically charge checked bag fees to certain passengers in breach of its passenger contracts.

In addition to the base amount, Bazerman is also seeking unspecified penalties, interest and attorneys' fees.

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    Comments

    go get 'em

    About time someone with agency stood up and bit back at this greedy nonsense.

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    Voting is closed. 120

    Very stupid of AA

    By on

    That's a great way to piss off the passengers who spend the most money and get them to take their business elsewhere. It's also stealing and blatantly illegal. From what this says, it must have been corporate policy or it wouldn't have been so widespread.

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    Voting is closed. 64

    Bags

    Given how subsidized the American airline industry is, all passengers should get their first bag free

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    Voting is closed. 64

    More secure, too

    There is much more time to inspect and x-ray a suitcase going into the hold, and the person handing it over has no control over where it ends up in the hold.

    If the whole system was really about security ...

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    Voting is closed. 43

    Given that taking your luggage with you is a necessity

    By on

    for nearly everyone who travels, while being able to watch any one of 200 channels of cr&^^y TV during the flight isn't, it's the in-flight "entertainment" that should carry a charge - not the luggage.

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    Voting is closed. 42

    On the other hand,

    ... how about if the airlines decide whether offer free bag check (like Southwest but not Jet Blue), free change to earlier or later flight (like Jet Blue but not Southwest), fees for everything but dirt cheap fares (WOW, Ryanair, etc.) and then let the customer decide?

    American doesn't have monopoly pricing power on all of its routes, and yet it gets away with charging $25 per bag, which must mean they're offering something else people consider to be valuable.

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    Voting is closed. 33

    Like, maybe ....

    ... especially cramped and uncomfortable seating. I used to fly America and United, but now do my best to avoid them...

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    Voting is closed. 36

    Why?

    Why first bag free, as opposed to, say, $25 off the fare, or a free meal and two drinks, or a free taxi ride home from the airport?

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    Voting is closed. 24

    Good for you. Is it too hard

    By on

    Good for you. Is it too hard to realize that not everyone flies the same way? Or for just a business trip? Or maybe people with kids (especially lap infants) have to bring a bit more stuff? Durrr.

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    Voting is closed. 19

    Not at all

    Good for you. Is it too hard to realize that not everyone flies the same way? Or for just a business trip? Or maybe people with kids (especially lap infants) have to bring a bit more stuff? Durrr.

    Is it too hard for you to realize that not everyone flies the same way? And that therefore some of us would rather not have the price of checked luggage (which we're not going to use) bundled into the fare? Durrr indeed.

    The question on the table is what principle is served or public good is advanced by forcing airlines to bundle baggage charges into the fare. Southwest offers "free" checked bags and does quite well. JetBlue charges for checked bags and also does quite well. Obviously both models work; why force the entire industry into one or the other?

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    Voting is closed. 40

    Are you paying $25 less on

    By on

    Are you paying $25 less on average than when checked bags were free? There's no way to answer that question. I certainly don't feel like I benefit from this scheme, but there's no way around it unless there happens to be a Southwest flight where I'm headed.

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    Voting is closed. 14

    There's a key distinction here

    There's a key distinction between, on the one hand, bogus unbundling, which means taking something every customer uses and making it a separate charge on the bill in order to make the stated price look lower, and, on the other, taking something that not every customer uses and making it a separate charge, thereby allowing some customers who don't use the extra service to pay less.

    Examples of the former include a typical cable bill or rental car bill, which has a base price and then half a dozen junk fees added, but everyone who subscribes to cable or rents a car pays the additional fees, so the base price is intellectually dishonest. (Also, see, UMass tuition, but I digress....)

    Examples of the latter include, well... checked baggage on an airplane flight. Or a beer with your hamburger.

    Or are you making the claim that charging for checked baggage is bogus unbundling?

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    Voting is closed. 27

    IMO checked baggage fees are

    By on

    IMO checked baggage fees are bogus unbundling.

    I don't consider checking a bag to be a service I benefit from. The only reason I'd do it are because the TSA won't let me bring a bottle of wine or a normal-sized bottle of sunscreen onboard, or because the airline shrunk the carryon size limit to a ludicrously small 9" thick even though overhead bins are the same size as they've always been (or bigger on newer planes).

    Encouraging people to check bags will also speed up boarding times, which helps the airline significantly. Every minute the plane sits there is money down the drain. Indeed on my last few American flights they insisted on gate-checking my bag because I was boarding in the last group, supposedly because the bins were full, but in fact they were totally empty. The gate staff only cares about getting the flight out on time -- they don't care that I have to wait 45 minutes at baggage claim.

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    Voting is closed. 29