You knew airlines were raking in billions from fees. As air travel analyst Rick Seaney points out, travelers have had to develop “a high threshold for pain” and a $50 round-trip bag fee is helpful in that regard [and see Rick’s “anti-spin” below].
But did you realize this revenue has doubled in the past few years?
Fees – $27 Billion in 2012 Worldwide
According to an analysis of more than 100 global carriers by IdeaWorksCompany, fees – called ancillary revenue – surged to more than $27 billion dollars last year. That’s more than double 2009’s total of $13.4 billion and it’s a near 20% increase over 2011.
One of the more interesting nuggets in the report has to do with which airlines rake in the most fee money. Not so long ago, such lists were dominated by the so-called low-cost carriers but the legacy carriers are now on top – with a few exceptions.
Top 10 Airlines
Total Fee Revenue – 2012*
|1. United||$5.552 billion|
|2. Delta||$2.577 billion|
|3. American||$1.987 billion|
|4. Southwest||$1.655 billion|
|5. Qantas||$1.575 billion|
|6. Ryanair||$1.389 billion|
|7. Air France/KLM||$1.206 billion|
|8. EasyJet||$1.148 billion|
|9. US Airways||$1.073 billion|
|10. Korean Air||$721 million|
*Figures have been rounded.
The Spin on Painful Fees
The point of all this fee revenue is simple enough – as IdeaWorks President Jay Sorenson put it, “It is revenue desperately needed by airlines during troubled economic times.”
For another take, Mike McGearty, of CarTrawler (which bills itself as a technology company focusing on online car rental distribution for the travel industry) states, “Consumer demand for choice and convenience of complimentary products has forced the travel industry to reinvent itself with airlines leading the way. Consumers are more loyal to carriers that address their needs.”
Air travel analyst Rick Seaney responds by asking if anyone likes fees, whether they’re slapped on air travel, hotels or even cell phones. He adds, “Spinning the travel fee generation as consumer-friendly is simply wishful thinking coupled with the fact that travelers – and I’ll say it again – have a high threshold for pain.”