Continental jumped on the $25 dollar party wagon today.  Now they join Delta (and USAirways) at the top of the baggage fee pile – $25 bucks for one bag.  Both Delta and Continental will knock $2 dollars off the price if you pay online.  USAirways is currently discounting the price by a whopping $5 dollars if you pay online.  Expect that to last about six more seconds if the rest of the industry continues to jump on this.  And I can’t imagine a scenario where they don’t.  If they all match, and we all continue to pay, where do you think the next stop on the fee meter is?  $30 dollars?   Why not $50?  Pretty soon the fee for your bags will be more than your fare.  Keep in mind that the $25 dollar price point I’m harping on is just for the first bag.  Have the unmitigated gall to check a second bag, and you’ll pay $35 dollars for that one.

I can’t emphasize enough that I have no problem with “unbundling” in principle, and that includes baggage fees.  However, I think the industry runs the risk of pricing this particular service somewhere well north of what customers are willing to tolerate without some kind of backlash.  Will the airlines figure that out before customers have started to vote with their feet?  Time will tell.