Airlines collected record baggage fees in 2012 - Ahwatukee Foothills News: Money

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Airlines collected record baggage fees in 2012

Print
Font Size:
Default font size
Larger font size

Posted: Thursday, May 30, 2013 12:01 pm

New York -- U.S. airlines collected more than $6 billion in baggage and reservation change fees from passengers last year — the highest amount since the fees became common five years ago.

Passengers shouldn’t expect a break anytime soon. Those fees — along with extra charges for boarding early or picking prime seats — have helped return the industry to profitability.

Airlines started charging for a first checked suitcase in 2008 and the fees have climbed since. Airlines typically charge $25 each way for the first checked bag, $35 for the second bag and then various extra amounts for overweight or oversized bags.

The nation’s 15 largest carriers collected a combined $3.5 billion in bag fees in 2012, up 3.8 percent from 2011, according to the Bureau of Transportation Statistics. Fees for changing a reservation totaled $2.6 billion, up 7.3 percent.

The airlines took in $159.5 billion in revenue last year and had expenses of $153.6 billion, according to the government. That 3.7 percent profit margin comes entirely from the baggage and change fees.

Delta Air Lines once again took in the most fees — $865.9 million from baggage alone — but it also carried more passengers than any other airline.

Delta collected $7.44 per passenger — about average for the industry. Low-cost carrier Spirit Airlines collected the most, an average $19.99 per passenger in baggage fees last year.

The government only requires the airlines to report revenue from baggage and change fees.

Passengers can expect to pay even more this summer.

American Airlines, Delta, United Airlines and US Airways all recently raised the fee for changing a domestic flight reservation from $150 to $200.

Even Southwest Airlines, which promotes its lack of change fees and “bags fly free” policy, recently announced a new policy on no-shows. Passengers who buy the cheapest tickets will have to cancel a reservation before departure; otherwise they won’t be able to apply credit from the missed flight toward a later trip.

Many fees were first introduced to allow airlines to offset rising fuel costs. In 2008, jet fuel spiked 46 percent to an average $3.06 per gallon as the price of oil hit an all-time high.

Airfares have climbed in recent years but jet fuel remains costly — in 2012, the airlines paid an average of $2.96 a gallon. Passengers have shown reluctance to book tickets if the base fare is too high, hence the introduction of more fees — collectively referred to in the industry as ancillary revenue.

Besides baggage and change fees, airlines are charging fees for extra legroom, the ability to skip security lines and for premium meals.

But the airlines are being aggressive about expanding those fees. United recently said in an internal newsletter that it hopes to collect $19.29 in average ancillary revenue per passenger by the end of 2013, up 9.1 percent from the amount it collected last year. JetBlue, which doesn’t charge for the first checked bag, took in a record $22 per passenger in other fees in the first quarter, up 3 percent from the year-ago quarter.

Airlines are also increasing certain fees depending on demand.

Thanks to a computer upgrade, United can now charge passengers different prices to upgrade to an Economy Plus seat, which has more legroom, depending on the route, day of the week, time of day and the location of the seat. The airline said it increased the dollar value of those seats 25 percent in 2012.

© 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

More about

More about

More about

  • Discuss

The Grass Isn’t Always Greener

This is HR’s go-to advice for employees who put in their two-week notice, especially if that employee is heading to a competitor: “Just rememb…

Published: July 28, 2016 - 9:01 am @ http://timsackett.com/2016/07/28/the-grass-isnt-al…

Influence at the DNC: More than 60 superdelegates are registered lobbyists

Lobbyists wield enormous influence and, depending on your point of view, can bring positive or negative changes to our government. From reptil…

Published: July 28, 2016 - 8:56 am @ http://sunlightfoundation.com/blog/2016/07/28/infl…

BAM! POW! Native Artists to Hold First Indigenous Comic Con

What began as a small convening of Native American artists at the 2011 Phoenix Comicon has grown into the already sold-out, first-ever Indigen…

Published: July 28, 2016 - 8:55 am @ http://www.telesurtv.net/english/news/BAM-POW-Nati…

Ottawa hires temps to staff Phoenix call centres as pay problems could last until October

Temp-agency workers hired by the federal government to help staff a Phoenix call centre handling inquiries from the 80,000 public servants hav…

Published: July 28, 2016 - 8:57 am @ http://www.cbc.ca/news/politics/phoenix-temp-agenc…

Scott Prior for AZ Senate, Legislative District 16

Find out why Loading... The interactive transcript could not be loaded. Loading... Loading... Rating is available when the video has been rent…

Published: July 28, 2016 - 8:31 am @ https://www.youtube.com/watch?feature=youtu.be&v=2…

The Next President Will Likely Appoint 4 Supreme Court Justices: Which President Do You Want Picking Them?

This election is all about the Supreme Court that will shape our lives for the next 30 years. Many progressives disagree with Hillary Clinton …

Published: July 28, 2016 - 7:56 am @ http://www.alternet.org/election-2016/next-preside…

IVs and Oxygen Tanks: Next-Gen Hotel Wellness Trends

Hotels are racing to help you unwind. At least, that’s what you’d be led to believe if you’ve been following the flurry of wellness news that …

Published: July 28, 2016 - 7:54 am @ http://www.bloomberg.com/news/articles/2016-07-28/…

Man found dead in Phoenix standoff was accused of killing wife at Fort Bragg

PHOENIX (KPHO/KTVK) - A suspect found dead after a standoff with the FBI and Phoenix police Wednesday afternoon has been identified as a man a…

Published: July 28, 2016 - 7:30 am @ http://www.azfamily.com/story/32558362/man-found-d…

'That's a huge chunk of money': Federal worker laid off in Phoenix overhaul owed over $100K

A former federal compensation adviser who was laid off and chose to retire when Ottawa transitioned to the new Phoenix payroll system now find…

Published: July 28, 2016 - 7:26 am @ http://www.cbc.ca/news/canada/ottawa/phoenixfallin…

On day 4, it will be Hillary Clinton’s turn to convince voters

After three days in which her advocates have spoken for her, Hillary Clinton will take the stage Thursday on the final day of the Democratic N…

Published: July 28, 2016 - 6:25 am @ https://www.washingtonpost.com/politics/on-day-4-i…

Facebook

ahwatukee.com on Facebook

Twitter

ahwatukee.com on Twitter

RSS

Subscribe to ahwatukee.com via RSS

RSS Feeds

Spacer4px

Most Popular

Online poll

Loading…