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United Continental (UAL) Increases Bag Fees, Follows JetBlue
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In a bid to counter the threat posed by rising oil prices, United Continental Holdings, Inc. (UAL - Free Report) has hiked checked baggage fees. The carrier now charges $30 and $40 for checking the first and second bags, respectively. The earlier charges were $25 for the first bag and $35 for the second. The elevated fee structure, which took effect from Aug 31, is applicable on flights operating on the North American, Caribbean and Central American routes.
This Zacks Rank #3 (Hold) Chicago-based carrier’s announcement comes close on the heels of a similar move by Long Island City, NY-based JetBlue Airways Corporation (JBLU - Free Report) .The low-cost carrier had hiked the fee to $30 for the first checked bag from $25. Fees for the second and third checked bags have also been increased. However, United Continental, unlike JetBlue, did not announce an increase in fees to change tickets.
We note that the rise in fuel costs has been hurting the airline space big-time. Oil prices have risen roughly 10% year to date. Since expenses on fuel are significant for airlines, an increase in oil prices is unfavorable for the space. In fact, airline heavyweights like American Airlines Group Inc. (AAL - Free Report) and Delta Air Lines, Inc. (DAL - Free Report) have trimmed their respective full-year earnings per share forecasts due to high fuel costs.
With bottom-line growth hampered by high fuel costs, airlines are looking to augment their top lines by raising fees for checking bags and other services. Given this current environment, we expect other airlines to follow the path adopted by JetBlue and United Continental for generating higher revenues. Naturally, we expect investors’ focus to remain on this burning issue.
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United Continental (UAL) Increases Bag Fees, Follows JetBlue
In a bid to counter the threat posed by rising oil prices, United Continental Holdings, Inc. (UAL - Free Report) has hiked checked baggage fees. The carrier now charges $30 and $40 for checking the first and second bags, respectively. The earlier charges were $25 for the first bag and $35 for the second. The elevated fee structure, which took effect from Aug 31, is applicable on flights operating on the North American, Caribbean and Central American routes.
This Zacks Rank #3 (Hold) Chicago-based carrier’s announcement comes close on the heels of a similar move by Long Island City, NY-based JetBlue Airways Corporation (JBLU - Free Report) .The low-cost carrier had hiked the fee to $30 for the first checked bag from $25. Fees for the second and third checked bags have also been increased. However, United Continental, unlike JetBlue, did not announce an increase in fees to change tickets.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We note that the rise in fuel costs has been hurting the airline space big-time. Oil prices have risen roughly 10% year to date. Since expenses on fuel are significant for airlines, an increase in oil prices is unfavorable for the space. In fact, airline heavyweights like American Airlines Group Inc. (AAL - Free Report) and Delta Air Lines, Inc. (DAL - Free Report) have trimmed their respective full-year earnings per share forecasts due to high fuel costs.
With bottom-line growth hampered by high fuel costs, airlines are looking to augment their top lines by raising fees for checking bags and other services. Given this current environment, we expect other airlines to follow the path adopted by JetBlue and United Continental for generating higher revenues. Naturally, we expect investors’ focus to remain on this burning issue.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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