United Airlines, FedEx in tie-up for door-to-door baggage service

United Airlines, in partnership with FedEx Corp, has become the first US airline to offer a Door-to-Door Baggage service for its passengers within the United States. The service will charge passengers$149 one way for a journey of less than1,000 miles and $179 one way for longer ones.

Though earnings from the service are expected to be modest in relation to overall earnings, United believes it can generate more than $1 billion in revenues from the scheme for 2009, according to Dennis Cary, senior vice president and chief marketing and customer officer.

According to United, up to 10 days prior to travel, interested customers may go to www.united.com/doortodoor where they will select their trip and schedule and pay for their shipment. The customers will have a print copy of the shipping document attached to the bag by FedEx. On the scheduled pickup day, the bags will be picked up at a home, hotel, office or other locations, between noon and 6 pm, or they can also be dropped off at FedEx or Kinko's offices.

By 4:40 pm the next day, the luggage or other goods will be delivered to the customer's final destination.

Though the scheme may not attract very many customers, combined with other ancillary revenue and fee initiatives, like premium seating, it has the potential to add a decent sum to the eventual total.

According to industry observers, the fact that customers now have a choice of service may perhaps be more important as airlines seek innovative ways to boost revenues as well as lure and retain customers. They say this is yet another indication of how airlines are gradually evolving into retail companies, offering customers a bit more than just a ticket.

For United, the Door-to-Door Baggage scheme may also help ease other problems. It handles approximately 200,000 suitcases a day but has a particularly bad record for handling luggage. According to the Department of Transportation, United received 33,000 lost or stolen luggage reports in August, the last month for which statistics are available, giving it a ranking of 14th out of 19 carriers in the category.