American Airlines has decided to charge $15 for the first checked in bag. As a not infrequent air traveler, this strikes me as the ultimately boneheaded move. Most of the flights I am on are fully oversold already, and one of the more annoying issues is that the overhead storage always gets filled with luggage halfway through boarding. People just don't like checking in their luggage - overstuffing a carryon (or carrying a bigger one onboard) is much more convenient.

If capitalism has taught anybody anything, it is that usually businesses get ahead by offering convenience; they make profits by taxing convenience. People will pay for something that is perceived as having value, and will resent a price increase on a bad service. Most of my fellow business travelers resent having to check in a bag because of the additional time required to retrieve it, as well as an increased risk of losing the bag in transit - and the US airlines' track records on lost luggage are particularly appalling. The delays caused during the boarding process by too many carryons again translate in more money lost for the airlines, as pilots have to make up the lost time by flying faster and burning more fuel. I doubt that a $15 tax on the first checked bag - something people avoid doing already - will recover any of that cost.

If somebody at American Airlines would be smart, they'd put a tax on the large carryons. The perception of paying for convenience would be kept intact, business travelers would be happier because (maybe) the overhead bins would be able to accommodate their luggage, and airplanes would manage to leave the gate ontime in maybe a higher percentage, letting pilots fly at a more leisurely pace. I'm just wondering what sort of McKinsey alumni Harvard grad it took AA to come up with their current proposal...