Earnings for the first quarter of 2026 will soon be announced, and there’s little question that profits will be squeezed by ever-rising fuel prices. Everyone will be listening to hear what the airlines have to say about future guidance, but United has decided it is not waiting around. In the last week, it has pushed for a hefty bag fee increase and introduced Basic fares in premium cabins. While I imagine these moves would have happened at some point, I wouldn’t be surprised to hear the timing was moved up to help keep United’s guidance on track for the year.
Let’s start with the bigger news, Basic fares are coming to premium economy (Premium Plus) and business class (Polaris) for long-haul travel. Strangely, they aren’t happening in domestic First Class yet, and I’m not sure why. Perhaps it’s because long-haul coordinates with joint venture partners, and that’s where the focus has been to this point. Or maybe domestic First just isn’t a big enough pot of money to move the needle.
The implementation is almost entirely what you’d expect. Here’s the Polaris chart:
The only surprise here is that lounge acces is still included for Basic fares, it’s just United Club access instead of the Polaris lounge. That’s the only thing here more generous than I would have expected. Everything else is pretty much what I expected we’d see.
Premium Plus is exactly the same except, obviously, there is no lounge access for any Premium Plus fares. And the ability to upgrade from Premium Plus is far more important than than it is from Polaris.
The Basic, er, Base product is not rolling out until “later this year.” I do have to assume this wasn’t going to be announced this early until plans changed. After all, just a couple weeks ago, Lufthansa Group rolled out its Basic fares (called “Light”) for premium long-haul but it was excluding North America. If United was really only announcing a couple weeks later, I can’t imagine that would have been held back by Lufthansa.
Instead, what I must assume happened here is United had planned to do it at some point, but with oil remaining high, it continues to work hard to try to offset the impact with higher fares. And one way to do that is to create a Basic structure which pushes people up to higher fares.
As is always the case, Basic isn’t created for people to buy. It exists because there are some people who won’t buy up to a higher fare, but most people will. And that’s United’s goal here… it wants people to pay more for the same thing they get today.
This announcement feels a little rushed in that the rollout date hasn’t even been stated, but it will sure make it easier for United to face Wall St analysts on the upcoming earnings call. “Look at all the things we’re doing!”
That’s also where the bag fee increase comes into play. The bag fee is the new change fee. It continues to spiral higher and higher with seemingly no end. (Remember when change fees hit $200 for a domestic ticket?)
JetBlue kicked off this party with an increase of $4 on its base level bag fees, with the lowest rate rising from $35 to $39, though it varies by market and timing and some rose by $9.
United saw that and laughed. It took it much further, now raising the lowest pre-paid bag fee from $35 to $45. That’s a $10 increase, but it’s also a $5 discount off what you’d pay if you did it within 24 hours of travel. So in some cases, the first bag on a domestic trip is now a whopping $50. The second is $10 more. Third checked bags and beyond are going up even higher. Instead of $150, it’s now a $200 fee.
Of course, you can offset this by getting an airline credit card or having elite status, both of which give you at least one free checked bag. But this puts us into that hamster wheel. Now that the benefit of having no first bag fee is more valuable, shouldn’t the annual fee on that credit card go up too? Just wait, it’ll happen eventually.
To its credit, United did not try to say it was doing any of this because of higher fuel prices. It just said on bag fees that it hadn’t touched them in two years. But we all know why this is happening now, and it is most certainly tied to fuel. And no, once fuel prices go back down, these fare structures and fees will not.
