2024-02-21 06:00:00
American Airlines announced an increase in checked baggage fees for domestic flights. (Shutterstock)

Flying with a checked bag just became more expensive on American Airlines. The airline announced this Tuesday, February 20, that the cost of checking a suitcase for domestic flights, which used to be $30, will increase to $35 if purchased online or $40 at the airport. For a second suitcase, the fee is $45, up from $40 previously, regardless of how it is purchased.

The new prices apply to flights booked starting Tuesday in the main cabin; suitcases in premium cabins remain free. It is the first time American has raised the prices of its checked bags since 2018. It follows Alaska Airlines, which increased the cost of the first checked bag from $30 to $35 in January.

Scott Keyes, founder of cheap flight alert service Going, said he was not surprised by the move. “Airlines tend to move in packs,” so when one airline does something like increase the price of its bags, many others see it as a sign that it’s time for us to do it too, he explains. “When it comes to fees, it’s not often you see airlines competing and lowering prices.”

The cost for the first checked bag is now $35 if payment is made online, and $40 if payment is made at the airport. (Illustrative Image Infobae)

JetBlue and United raised their fares to $35 for bags not paid for more than 24 hours in advance in early 2020, but kept the price at $30 for those who paid in advance. JetBlue now charges $45 for the first bag and $60 for the second within 24 hours of departure; For those who pay more than a day in advance, the first suitcase costs $35 and the second, $50.

Delta charges $30 for the first checked bag. Southwest remains aloof and allows you to check two bags for free. There’s good news for those traveling with excess luggage on American: Lightly overweight suitcases will cost less. Instead of costing $100, a suitcase weighing between 25 and 26.5 kilograms will only cost $30 more.

American’s increase in the price of checked bags comes amid widespread scrutiny of so-called “junk fees” charged by airlines, credit card companies, ticket sellers and others, and a push for the Biden administration in favor of greater transparency.

This fare adjustment is the first that American has made since 2018 and follows the trend started by other airlines such as Alaska Airlines, which had previously increased the cost of the first checked bag from $30 to $35. (REUTERS/Tingshu Wang)

Before, travelers flew without paying anything extra for checking a suitcase. Airlines first introduced baggage fees in 2008, when fuel prices skyrocketed; Last year, they earned $33.3 billion for this concept, according to an estimate published this Tuesday.

Jay Sorensen, president of consulting firm IdeaWorksCompany, which issued the estimate along with car rental technology company CarTrawler, said he didn’t think more airlines would follow American’s lead. Sorensen interpreted the move as a way to get more people to sign up for the airline’s credit card; Most cardholders get a free checked bag on domestic flights.

Their report notes that baggage fees often encourage more passengers to carry carry-on luggage, which “has become an operational challenge and customer pain point.”

JetBlue and United also changed their pricing policies for checked baggage at the beginning of 2020, establishing a fee of $35 under certain conditions. (Illustrative Image Infobae)

Travelers often fight for space in overhead bins or are forced to check a suitcase at the gate, even if there is room on the plane. Airlines are trying to avoid delays while passengers solve the logistical puzzle of fitting their suitcases into sometimes tight spaces.

Keyes says “the most logical thing” would be for airlines to charge high fees for carry-on bags and lower prices for checked bags, a tactic Spirit Airlines has adopted. Although bag prices vary, a midday flight from Baltimore to Fort Lauderdale in early March shows a price of $61 for a checked bag during the booking process, while a carry-on bag would cost $69.

For travelers who don’t necessarily mind carrying their luggage with them — but don’t want to pay a checked bag fee — Keyes suggests taking it with you and waiting to see if the agent asks for volunteers to check your items at the gate. “I’d be hard-pressed to remember the last time I had a flight where there wasn’t a gate agent asking people to check their bags to their final destination,” he says.

(c) 2024 , The Washington Post

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The Bitcoin exchange-traded fund has been widely discussed since it was first announced as a possibility for the crypto environment. The reason is rather straightforward: this type of asset would make the market more accessible, allowing investors to trade digital coins even when they don’t directly own them. In 2023, investors started looking into how to buy Bitcoin  once more as the prices began to climb back once more, following a very difficult 2022. With the halving expected sometime in April 2024 will be another positive year for Bitcoin, and it is indeed likely to surpass the achievements of 2023.

The official approval of a Bitcoin ETF would propel prices even further, but it is still uncertain when the announcement will come. Some hoped they would get an answer in December, but this didn’t pass. Some investors believe January is no longer likely either, but that the SEC will come up with an answer sometime during 2024.

Compromised account 

Cryptocurrency investors have been waiting for approval on the ETFs for several months now, and the patience of many is wearing thin. There’s no surprise this is the case, considering there have been so many delays. Instead of tempering enthusiasm, the prolonged wait stoked the flames, and many are now more excited than ever. The SEC has earned something of a negative reputation among community members for its repeated postponement of the announcement date.

The regulators have cited concerns regarding the safety and security of cryptocurrencies, in light of the collapse of several exchanges over the past years. These events caused considerable trouble for investors, who lost significant amounts of capital in one fell swoop. On January 9th it was announced that the Twitter/X account belonging to the Securities and Exchange Commission had been compromised. An unauthorized tweet was posted, saying that the agency had approved the Bitcoin ETF for trading.

Although fake, the post managed to cause a momentary spike in the price of BTC, but then it quickly backtracked. As of January 10th, the cost of Bitcoin is situated above $46,000, a considerable increase in light of the struggles of the past couple of years. The SEC said they are investigating the matter to determine the next steps and the actual scale of the misconduct.

The decision 

Some investors expect the SEC to make a decision regarding the course of the Bitcoin ETFs until the end of the month. While some believe the answer will be positive, others are not so sure, considering that the Commission has opposed the assets for many years. Numerous asset managers have filed applications, but they are all still waiting for a response.

Throughout all these trials, Bitcoin has remained strong. Not only is it the most robust cryptocurrency, it is one of the best-performing assets overall during the last year. It regained a significant portion of its value, growing its market cap in the process. An ETF approval would allow even more potential users to join the ranks of the investing community. While many are not thrilled by the potential of owning crypto coins, they would most likely respond much more positively to ETFs.

Institutional investors are the most anticipated, as they tend to work with substantial amounts of capital. However, it seems clear that investors must still wait a while to see if these transactions will even become possible.

Competitive fees 

The crypto space is already known as a very volatile and constantly changing environment. With the much-anticipated arrival of ETFs, it is expected to become even more so. There are almost a dozen ETFs that are competing at the moment, and the issuers are already showing signs of engaging in a price battle. However, the situation will naturally evolve further in the future. For instance, ARK Invest joined forces with 21Shares, and the initial plan was for transactions to include a free of 0.8%. But on January 8th, they made an announcement saying that there would be no fee for the first six months of use.

Many have taken similar steps, including Invesco and Bitwise, offering 0% costs for the first 180 days. Others, such as Grayscale, will charge 1.5%. Valkyrie Bitcoin Fund has a 0.49% fee following the first three months. For those that only offer fees following six months, Invesco has a rate of 0.39%; Bitwise goes for 0.2%and WisdomTree Bitcoin Trust for 0.3%. iShares has 0.25% following twelve months, and Fidelity 0.25% following July 31st 2024.

BTC and futures 

Since ETFs are such a new thing, analysts are still discussing the predictions of what might occur. Their ability to keep track of Bitcoin and its futures has been consistently debated. So far, strategists say that Bitcoin has been tracked well so far, but that the market is not yet mature, which might mean problems. At the other end of the spectrum, the futures market is mature and highly regulated. It can be pretty difficult for these two traditions to reconcile.

Yet, it’s important to remember that only time can tell how the environment will develop. Some are also concerned that the redemption process can result in Bitcoin exchange-traded funds going at a premium. But, as investors begin to get a better feeling of the market and filter the details out, things are expected to level out on their own. Regions that have already launched ETFs have a story to tell as well.

The general consensus is that there is no general impact on trading efficiency. The underlying assets remain liquid, and there will also be a lot of users, so the trading ecosystem will most likely pick up speed fast.

To sum up, everyone in the market has widely anticipated ETFs, but it will still be some time until investors will be able to enjoy them. It is not yet clear how much money the ETFs will manage to attract, but just the applications propelled the price quite significantly. Most notably, BlackRock took the price from $25,000 to $30,000 in just a few days last June. That can serve as quite an indication of what’s to come.