Bag fees, change fees, reservations fees all add up to billions in revenue for airline industry
Katia Hetter, CNN
11:49 AM, May 16, 2013
Those airline baggage and reservation change fees add up, to the tune of more than $6 billion.
U.S. airlines collected $3.5 billion in baggage fees and $2.6 billion in reservation change/cancellation fees last year, according to U.S. Department of Transportation data. That was a 3.8% increase in baggage fees and a 7.8% increase in reservation change/cancellation fees compared with 2011.
Delta Air Lines came out on top in baggage and reservation change/cancellation fees, collecting $1.6 billion last year. Delta's baggage fees totaled $865.9 million and it collected $778.4 million in change/cancellation fees.
United Airlines landed in second place in both categories, with $705.5 million in baggage fees and $660.9 million reservation change/cancellation fees.
Those fees returned the airlines to profitability in 2012. Total revenue for all passenger airlines last year was $159.5 billion, while total operating expenses were $153.6 billion. For the 10 largest U.S. airlines, that translated into net income of $201 million last year, up from a $500,000 loss in 2011.
And there's no sign that the fees are going away.
Delta, United, American Airlines and US Airways recently raised the cost of changing a reservation from $150 to $200 for many nonrefundable tickets for domestic flights. Frontier Airlines will soon start charging a $25 to $100 carry-on bag fee to many customers who book their tickets through third-party sites, excluding certain members of its frequent flier program.
American was the first U.S. airline to charge customers for the first bag checked, starting in June 2008. The fee was $15, and other airlines quickly followed suit. That year, American collected $277,991 in baggage fees, according to U.S. Department of Transportation data. The U.S. airlines collected $1.1 million that year.