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Delta To Track Checked Bags for Passengers

Could other carriers AMR, LUV or UAL follow suit?


Who among the commercial flying public hasn’t wondered if their checked bag would be there when they stepped off the airline?  Delta (NYSE: DAL) is trying to remove some of the worry about lost or misplaced luggage through a new service it launched earlier this month that allows customers to track their checked bad on the airline.

The Atlanta, Ga.-based airline stock is the first major carrier to offer the service, but other airlines like Southwest (NYSE: LUV), American Airlines parent AMR Group (NYSE: AMR) and United-Continental (NYSE: UAL) could soon follow Delta with the ability to track bags if the effort is successful. Come August, the Transportation Security Administration will require commercial airlines to refund your checked-baggage fees if they lose your luggage or if it is delayed by more than 12 hours.

So get ready to have a slightly better flying experience because that’s income the airlines aren’t going to want to give up, especially during these times of rising fuel prices. Or at any rate, least get ready for baggage tracking in an effort to meet those goals.

The airlines have come to depend on the fees they charge for checked bags, meals and upgrades, to boost revenue. Last year, the industry took in about $22 billion in such additional fees.

Other airlines have focused on baggage service. Alaska Air Group,  Inc. (NYSE:ALK) which operates Alaska Airlines, guarantees its customers that their luggage will arrive within 20 minutes after the plane is parked at the gate or they will receive $20 in discount codes, or 2,000 mileage points. And United Airlines parent, United Continental Holdings Inc (NYSE: UAL) offers its passengers track able overnight delivery with FedEx Corp. (NYSE: FDX) for a fee of $79 to $99 per item each way to their destination choice. Whether these airline perks continue in light of the TSA’s new mandate and Delta’s new service remains to be seen.

Delta actually has been able to track passenger bags since 2007, when it invested $100 million in a computerized system that uses hand-held scanners and conveyer belts to move and track baggage. Unfortunately, it took the prospect of lost revenue for the airline to make it available to its passengers.

As of this writing, Cynthia Wilson did not own a position in any of the stocks named here.

Article printed from InvestorPlace Media,

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