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Baggage Fee's Make $3.35 Billion for Airlines

May 5 2014, 9:58pm CDT | by , in News

Baggage Fee's Make $3.35 Billion for Airlines
Clemens Bilan/Getty Images

Fee's Down 4-percent From Last Years Earnings

U.S. scheduled passenger airlines reported a net profit of $7.3 billion in the fourth quarter of 2013, up from a loss of $188 million in the fourth quarter of 2012, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today in a release of preliminary data.

The BTS reports that Total operating revenue for all passenger airlines in the October to December fourth-quarter of 2013 was $49.1 billion. Airlines collected $29.3 billion from fares, 59.7 percent of total fourth-quarter operating revenue.  Total operating expenses for all passenger airlines in the fourth-quarter of 2013 were $46.4 billion, of which $12.1 billion, or 26.1 percent, was used for fuel and $11.1 billion, or 24.0 percent, was used for labor.

Airlines collected $3.35 billion in baggage fees, down 4-percent from last year, and $2.81 billion in reservation change fees, according to U.S. Department of Transportation data released Monday.
 
Robert Mann, a former American Airlines executive and now an aviation consultant, said money from bag fees has leveled off because the mix of passengers has changed — by the airlines’ design.

“You have more people exempt because they use the right credit card or they get status in the airline’s loyalty program,” he said. “The passenger who gets whacked by the bag fee is the infrequent flier.”

Delta Air Lines topped the list, collecting $1.67 billion last year: $840 million in reservation change/cancellation fees and $833 million in baggage fees. United Airlines came in second place, with $1.38 billion in fees: $756 million in reservation cancellation/change fees and nearly $625 million in baggage fees, according to CNN.

 

The new airline created by the merger of American Airlines and U.S. Airways, which are still reporting their data separately.  American ranked third in the reservation cancellation and change fee category, collecting $521 million in fees, while US Airways came in fourth place with $327 million. U.S. Airways was third for baggage fees with $528 million, while American collected $506 million to come in fourth.

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