American Airlines is set to pay at least $7.5 million to settle a lawsuit for overcharging customers for baggage fees, according to a deal reached last week.
A group of passengers from Texas, California, Missouri and Minnesota sued American Airlines in federal court in Fort Worth in 2021 for charging to check luggage even though they had airline status, credit cards or bought premium tickets that gave them free bags.
The passengers said they showed up at the airport and had to pay a fee to check their bags, even though they had confirmation emails and receipts saying that they wouldn’t have to pay anything.
Lawyers came to a preliminary deal in August before the case went to trial and last week presented the settlement to Judge Reed O’Connor, who has to approve the deal.
American charges between $30 and $200 for checked bags on domestic flights and more for flights to South America, Europe and Asia, depending on the type of ticket. But flying with one or more free bags is one of the major perks of getting airline status in its AAdvantage program or an American Airlines-branded credit card through companies such as Citi and Barclay’s.
American brings in more revenue than any other carrier in luggage fees, collecting about $1.2 billion in 2021, according to the Bureau of Transportation Statistics. Commercial carriers in the U.S. charged about $5.3 billion in fees in total.
The settlement will force American to pay at least $7.5 million plus legal fees. Customers will be eligible for $25 to $200 refunds for each instance if they were incorrectly charged and could get even more back if there is money left in the settlement account.
The class-action lawsuit covered passengers between 2013 and early 2021, but the terms of the settlement limited the group to those that checked bags with American between February 24, 2017, and April 9, 2020.
Administrators overseeing the settlement fund are still working out how to pay passengers, but those affected should be notified.
American Airlines declined to comment.
