Airlines collected record baggage fees in 2012

[ameriken]

 

Airlines collected record baggage fees in 2012

Today in the Sky

2:59 p.m. EDT May 14, 2013

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Spirit Airlines is among one of just three U.S. airlines to charge customers for both carry-on and checked bags.(Photo: Eliot J. Schechter for USA TODAY)

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• New York

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 oversize bags.

 

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

 

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% 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% to an average $3.06 per gallon as the price of oil hit an all-time high.

 

Airfares have climbed in recent years and 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.

 

Still, 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% from the year-ago quarter.

 

Airlines also are 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% in 2012.

 

http://www.usatoday.com/story/todayinthesky/2013/05/14/airlines-collected-record-baggage-fees-in-2012/2158983/

 

 

[tsap seui]

Heck, they need to make money somehow. All you ever saw before is how they were all losing money each year.

 

In August 2011 we were some of the last ones to board a United flight in Beijing who didn't have to pay for the 2nd checked in bag. They had signs announcing the change but still had some pissed off people checking in. Turned out we had bought our return tickets in China just a day or so before the change. Sorta funny listening to the enraged passengers comments.

 

I reckon they will all start charging for every bag, checked in or carried on, then every meal, drink of water, etc. Only $200 to change your flight, we're lucky, that $150 fee stood a long time.

 

I'm glad my flying days are much more limited. All that "convenience" was getting tiresome.

 

tsap seui

[Fu Lai]

Profitable business is fine but "3.7% profit margin comes entirely from the baggage and change fees" and more planned increases tells me that they think their administrative costs are well and fine so why not stick it to the customers to pay for them more? Kind of makes you feel sorry for the head of United Airlines whose salary fell to $7.9 mil.

 

"Compared to many other U.S. industry CEOs, airline CEOs maintain that they're relatively underpaid. Airlines state that they pay relatively high CEO salaries in order to attract top executive performers. The AFL-CIO website says that in 2011, average U.S. CEO compensation was more than $5.03 million. In comparison, then, the U.S. airline CEO compensation average of $3.5 million is a bit below average. The average 2011 income of all U.S. occupations was about $34,000."

[ameriken]

Kind of makes you feel sorry for the head of United Airlines whose salary fell to $7.9 mil.

 

 

Yeah, breaks your heart, doesn't it?

[Yuanyang]

Breaking News. 2013 will be another record year for same.

[Thomas Promise]

I can't recall the Narcissist that was in charge of the airline that wanted to charge passengers a fee to use the bathroom on the plane. They charge you for your bags and the mystery meals they serve on domestic flights now. International you get one free bag.

[tsap seui]

Jes think how great America would be if we got rid of CEO's------YEEEEHAAAAW Or at least limited them to a mere $20,000,000 a year for all their hard work. And no 2 week vacation either!!! Hell, every big business would run in the black without even laying anybody off.

 

If life wasn't so hilariously weird and crazy, I'd probably keel over from boredom.

 

tsap seui

[Stone]

This is what happens when the industry consolidates through mergers and acquisitions. Lack of competition for airlines and lack of choices for consumers. I paid $70 for a 2nd checked bag for flights between US and China.

[johnxiaoying]

FYI

 

We booked flights to Shanghai last weekend, leaving in September for $1030. I was surprised to see American allows two checked bags included in the airfare. United only one.

 

 

American Airlines

Travel to/through/from Japan or China

Number of Bags Allowed*

One personal item: No charge
One bag carry-on: No charge

Two bags checked. No charge

Size and Weight Per Bag Allowed*

45 in/115 cm (carry-on)


62 in/158 cm (checked)
50 lbs./23 kgs (checked)