First bag free on Delta with airline's AmEx card

Delta Air Lines is going to waive the fee for the first piece of luggage checked for most people who carry its frequent flier credit card.

The move by Delta and card issuer American Express could put pressure on other card issuers to do the same thing.

"Without a doubt, yes," said Odysseas Papadimitriou, CEO of CardHub.com, which compares credit card offerings. "I think it's not going to be long, because this is a big deal."

Starting June 1, Delta said it will waive the $25 each-way fee for up to nine people on the same reservation.

All the big airlines have so-called cobranded credit cards. Cardholders typically earn one frequent flier mile for each dollar they spend.

Credit card issuers like the cards because they typically carry an annual fee, and tend to attract cardholders who spend more. Airlines like them because they help build loyalty - and because they sell the frequent flier miles to the credit card companies.

The airlines have generally waived the first-bag fee for their top frequent-fliers. But the new move by Delta and American Express offers people who don't fly very often one of their few chances to avoid the fee.

"Here's a way out. Especially for people with excellent credit, which is what credit card companies want," said Papadimitriou.

The airline cards tend to be similar to each other, so letting cardholders check a bag for free is a good way for American Express to stand out, said David Robertson, publisher of the Nilson Report, a trade publication for the credit card industry.

Delta collected $215 million from baggage fees alone in the first quarter. American Express spokeswoman Mona Hamouly declined to say whether the company is paying Delta to give up the first-bag fee for people who carry its card.

Michael P. Taiano, a credit card industry analyst at Sandler O'Neill & Partners, said a credit card company would probably have to pay for something like waiving the first-bag fee.

"Clearly it's potentially a win for AmEx - you get more volume, and high-end volume at that," he said.

And for Delta customers, the change would save $200 in bag fees for a family of four traveling round trip.

"A $200 swing is enough to get somebody to book their flight on Delta versus another carrier," Taiano said.

The change applies to people who hold business or consumer versions of American Express Gold, Platinum, and Reserve SkyMiles cards.

Shares of American Express fell $1.43, or 3.1 percent, to close at $44.43 on Wednesday. Delta Air Lines Inc. rose 57 cents, or 4.9 percent, to $12.33.

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AP Airlines Writer Samantha Bomkamp contributed to this report.