United is increasing select bag fees for the holidays

Two of the most despised fees in the airline industry are those for changes and checked bags.

In late August, United became the first major U.S. airline to permanently eliminate the former for most domestic flights. Going forward, you won't need to pay the pesky $200 or more charge to modify a non-basic economy ticket. (Of course, Southwest has long been the leader in the no-change-fee movement.)

Shortly after United's announcement, the two other legacy carriers — as well as Alaska and Hawaiian — matched. Just last week, AA took its policy a step further by removing change fees for most long-haul flights as well.

United jolted the industry when it was first of the Big 3 to eliminate change fees, and now it's doing something innovative when it comes to bag fees.

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First, the bad news.

On flights to Bogota (BOG), Lima (LIM), Panama City (PTY), Quito (UIO) and San Jose, (SJO), United will now charge $30 for the first checked bag and $100 for the second, according to a carrier spokesperson. United has also tacked on an additional $50 for a third (or more) bag, increasing that fee to $200.

Previously, the fees varied by market, but in most cases, the first checked bag was free and the second cost anywhere between $40 and 100.

But here’s the thing: the newly increased rates are just temporary. They only apply for tickets purchased on or after Nov. 20, 2020, for travel between Dec. 1, 2020, and Jan. 15, 2021.

Every so often, airlines impose baggage embargoes on certain routes to ensure that planes can operate safely at full capacity. Planes have a limited maximum takeoff weight, and between fuel, passengers, cargo and luggage, carriers need to make precise weight and balance calculations.

On some routes during peak travel season, airlines need to limit the number of checked bags people can bring. While some carriers impose outright limitations, United’s move — to increase the cost of a bag — allows flyers to bring what they’re willing to pay for.

As the carrier explains,

Last year, we introduced a new way of managing checked baggage in Latin America for travel on select routes during peak travel periods – instead of significantly limiting the number of checked bags, we updated our fee structure to allow for additional bags.

In fact, this pilot first launched to a number of markets in July 2019, including: Guatemala City (GUA), Havana (HAV), Managua (MGA), San Pedro Sula (SAP), San Salvador (SAL), Santo Domingo (SDQ) and Tegucigalpa (TGU).

Henry Harteveldt, president of Atmosphere Research Group, told TPG that "it's all about economics and business. Rather than limit the number of checked bags each passenger can take, United is smart in letting the laws of economics 101 play out here."

Harteveldt continued "some might say that United is taking advantage of customers. But United is doing exactly what it should be doing to make sure its business is run well."

Note that the aforementioned changes only apply to coach tickets. If you’re looking to avoid checked bag fees, consider purchasing a premium-cabin fare.

Related: A complete guide to United Airlines' baggage fees and policy

Premium economy and business-class tickets to these destinations include two checked bags each. (The former is capped at 50 pounds each, the latter is up to 70 pounds each.) If the buy-up isn’t too high, it could definitely make sense to splurge for the extra space.

If you decide to stick with an economy ticket, having a co-branded credit card can save you money on these fees. The United Explorer Card includes one free checked bag, well the more premium United Club Infinite Card includes two.

Lastly, if you hold Premier status with United or the equivalent with a Star Alliance partner, you’ll enjoy free bags as well.

Related: How to avoid checked baggage fees on major domestic airlines

American Airlines also has seasonal baggage fees in select Latin and South American markets. For instance, the Fort Worth-based carrier charges $30 for the first bag to El Salvador during peak travel periods. Delta, on the other hand, doesn't appear to vary pricing based on the travel dates.

"This could also work in the opposite direction," Harteveldt said. "If there’s a low load factor, United might lower the price of checked bags on a certain route."

Only time will tell, but this move definitely lays the groundwork for dynamically priced luggage fees.