United Airlines raised checked bag fees by $10 on April 3, joining JetBlue in passing surging fuel costs to passengers as the Iran conflict drives jet fuel prices to record highs.
United Airlines raised checked baggage fees by $10 Friday as the U.S.-Israel military campaign against Iran drives jet fuel prices to nearly double their pre-war level, forcing carriers to pass fuel costs to passengers.
The increase brings United’s standard airport fee for a first checked bag to $45, up from $35. A second checked bag now costs $55, up from $45. Travelers who prepay online at least 24 hours in advance pay $40 for a first bag.
United’s move follows JetBlue Airways, which raised its rates on March 30. JetBlue’s new structure uses dynamic pricing, ranging from $39 for an off-peak prepaid first bag to $49 during peak travel periods such as spring break and summer, with an additional $10 airport surcharge on top.
The Fuel Price Shock
The price surge stems from Operation Epic Fury, the U.S.-Israel military campaign launched Feb. 28 that has severely disrupted shipping through the Strait of Hormuz — a chokepoint carrying 25% of global jet fuel exports — and sent energy costs soaring, according to energy analysts.
The Argus U.S. jet fuel index — which tracks prices at major hubs including Houston, Chicago, and Los Angeles — surged 85% since late February — from $2.50 to $4.64 per gallon — according to Argus Media data. West Texas Intermediate crude has surged from $60 to between $98 and $104 per barrel since the conflict began Feb. 28, according to energy market data.
Willie Walsh, director general of the International Air Transport Association, put the industry’s position in stark terms. “Fuel costs have risen sharply. With tight capacity and thin margins, airfares are already rising,” Walsh said, adding that “Apple will earn more selling an iPhone cover than the $7.90 airlines will make transporting the average passenger.”
United’s Response
United CEO Scott Kirby called the current environment a “stress event” for the sector. At current fuel prices, the airline faces an estimated $11 billion in additional annual fuel expenses — more than double its best-ever annual net income.
“Demand is incredibly strong right now,” Kirby said. “I’d much rather make the mistake of leaving a couple of months’ worth of demand on the table because we cut more and then you can get it back, as opposed to making the mistake of oil prices stay higher and longer and you’re flying flights that lose cash.”
To limit its exposure, United cut 5% of its planned second- and third-quarter 2026 flying capacity, pruning mid-week departures and overnight red-eye routes that are no longer profitable at current fuel costs. The airline is also swapping 50-seat regional jets for 180-seat narrow-body aircraft, spreading fixed costs over more passengers per departure.
United has suspended its Middle East flying. Chief Commercial Officer Andrew Nocella confirmed that “With Middle East routes suspended, the airline quickly reallocated seven 777 widebody jets … onto transcontinental routes like New York to Los Angeles.”
Baggage fees carry a specific financial advantage for carriers: they are exempt from the 7.5% federal excise tax applied to base airfares, allowing airlines to retain more of each dollar collected than an equivalent fare increase would.
An Industry That Follows
Analysts at Atmosphere Research Group and Thrifty Traveler described JetBlue’s March 30 move as the “first domino to fall” in a “monkey-see, monkey-do” industry, noting that once a major carrier raises ancillary fees, competitors typically match within weeks to avoid absorbing input costs in isolation. Delta Air Lines has so far held its first-bag fee at $35, while Southwest Airlines continues to offer free checked bags — though the carrier carries a negative ratings outlook from S&P Global that analysts say may test that policy’s long-term viability.
Industry analyst Henry Harteveldt framed the breadth of the impact. “It doesn’t matter whether it’s a budget airline or a global network airline, whether you’re paying first class or in coach, you are seeing higher fares for every type of flight on every type of route,” he said.
What Travelers Are Paying
The U.S. Travel Price Index showed airline fares 7.1% higher year-over-year in February 2026, before the conflict’s full impact reached pricing models. National average gasoline surpassed $4.02 per gallon on March 31, a four-year high. For a family of four, the combination of a roughly 20% fare increase and the new $10-per-bag fee could add more than $500 to the cost of a standard domestic round-trip flight, according to industry estimates.
Background
The current round of increases follows a wave of hikes in early 2024, when major U.S. carriers raised their standard first-bag fee from $30 to $35. Baggage fees accounted for 12% to 13% of total airline revenue in 2024; industry projections place that share near 14% by mid-2026, reflecting an estimated $145 billion in global ancillary income.
Key Takeaways
- United bag fee hike: United raised checked bag fees by $10 effective April 3, 2026, bringing the standard airport rate for a first bag to $45; JetBlue moved first on March 30, with peak-season rates reaching $49.
- Fuel shock: Operation Epic Fury disrupted Strait of Hormuz shipping, pushing jet fuel from $2.50 to $4.64 per gallon — an 85% surge — since late February.
- Tax advantage: Bag fees are exempt from the 7.5% federal excise tax on airfares, making them carriers’ preferred cost-recovery tool.
- Capacity cuts: United trimmed 5% of its planned second- and third-quarter 2026 capacity and shifted seven Boeing 777s from suspended Middle East routes to domestic flying.
- Traveler impact: A family of four faces more than $500 in added costs on a standard domestic round trip due to combined fare and fee increases.