Bag charge plan hits AA.

American Airlines plans to raise several hundred million dollars in new fees and axe many routes. AA is to become the first major US carrier to charge passengers to check in a first bag: the new fee of £7.50 comes as US airlines struggle with soaring fuel costs and a slumping economy.

Passengers from the UK and other International travellers will be exempt from the fee.

American joined other US carriers last month in charging $25 for a second checked bag. The airline says it will also cut a number of its domestic flights and get rid of older, fuel-guzzling jets.

Representatives from several other big US airlines say they are considering charging passengers for the first checked bag as well. A number of US airlines have gone out of business or filed for bankruptcy this year, and they are in a far worse financial state than UK or Asian airlines, as the US consumer cuts back.

Domestic flights are to be cut by 12% and thousands of job cuts are expected. At the same time, the company will retire some 75 aircraft from its fleet, focusing on the least efficient planes, in particular it's ancient Macdonald Douglas aircraft.