United Offers 'Subscriptions' for Leg Room, Checked Bags
Would you pay $499 a year to be guaranteed extra leg room on a flight? How about paying $349 a year in exchange for not having to pay for checked bags every time you go to the airport?
United Airlines is betting many of its customers will do just that. The airline has become the first carrier to offer 1-year "subscriptions" that offer you certain perks, provided you pay hundreds of dollars.
For an airline that collected more than $705 million in bag fees last year, the new subscriptions show the carrier is coming up with new ways to bundle and market services.
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In a statement announcing the new programs, Scott Wilson, United's vice president of merchandising and e-commerce said, "We are pleased that, as we launch these services, we are able to provide new options for customers to tailor their travel experiences."
$499 for Extra Leg Room, $349 Checked Bag
United will let you guarantee a seat with more leg room in Economy Plus on more than 700 United mainline flights and 180 United Express flights for $499 a year.. Right now cost of booking or upgrading a regular coach seat to an Economy Plus seat depends on the route, the plane and demand. By using flexible pricing and adjusting the cost depending on demand, United says it increased the dollar value of Economy Plus seats by 25 percent. Right now, United says the cost of booking an Economy Plus seat can range from $9 to $215, depending on the flight, the seat selected, and demand.
Separately, United is offering customers the opportunity to forego checked bag fees if they buy a 1-year subscription of $349. Currently, United charges $25 for a checked bag. With this offer, you can tailor the subscription for the number of bags you want covered, how many travel companions will be covered, and what region of the country are you flying.
So are the deals worth it? Obviously it depends on how much you fly. Those who make many trips a year on United every year may look at the offer and decide they can save money. Others will not. FareCompare did the math on checked bags and estimates it would take 8 roundtrip flights on United to make your investment pay off.
Next frontier of Fees
For months, airline executives have talked about coming up with new ways to bundle or market their fees. This is the just start of what we are likely to see. For airlines, a subscription plan is another way to "lock in" customers. After all, if you've already paid a $349 subscription for checked bags, are you likely to fly another carrier or will simply go with United?
If these offers interest you, read the fine print. There are restrictions to these subscriptions.
—By CNBC's Phil LeBeau; Follow him on Twitter: @Lebeaucarnews