2009: Airlines Made Billions on Bag Fees, Other Fees

If you’ve been flying at all during the past couple of years, this will come as no surprise: the airlines make a lot of money off ancillary fees, which includes fees for bags, transporting pets, even snacks and more.

In fact, for all of 2009, the U.S. carriers reporting to government’s Bureau of Transportation Statistics (BTS) collected $7.8 billion in fee revenue – which is a jump of 42% over 2008, the year that fees for first-checked bags were introduced by the legacy carriers.

Yes, bag fees did account for most of that 2009 fee revenue – $2.7 billion worth. But the second largest chunk of that revenue may (or may not) surprise you: it came from airline “change fees” which are applied if you have to change a non-refundable ticket (the cheapest kind of ticket, naturally). Many “change fees” now run as high as $150 dollars and up to $250 for international flights.

The remainder of that $7.8 billion comes from blanket fees, so-called unaccompanied minor fees, the pet fees and more. And it all adds up. But some airlines made more than others.

Delta, for example, took in more than $1.6 billion alone for ancillary fees in 2009, closely followed by American Airlines, which took in just over a billion – while US Airways made do with just $912 million.

Even the low cost carriers benefited: AirTran, for example, took in nearly $250 million in ancillary fees – and its fee earnings in the 4th quarter of 2009 represented an astonishing jump of almost 70% compared to the same quarter in 2008.

There are still some “fee holdouts” – JetBlue still allows customers one free checked-bag, and Southwest allows two – but both made money off other fees.

So, don’t expect to see ancillary fees ever disappear – or even drop much in price. According to the BTS, fees accounted for 6.5% of overall airline revenue, and that is real money that no carrier is going to give up.

For more information, see these detailed charts:

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Published: May 3, 2010