U.S. airlines take in less from luggage fees, but 4Q profit up
FORT WORTH — Airlines are collecting less money from bag fees than they did two years ago, but are making up for it by adding extra charges to a slew of amenities, including getting a decent seat.
The government reported Monday that U.S. airlines took in $3.35 billion from bag fees in 2013, down 4 percent from 2012. That is the biggest decline since fees to check a bag or two were instated in 2008.
The bag-fee figure was part of information released by the Department of Transportation, which said that airlines earned $7.3 billion in the fourth quarter of last year, reversing a loss of $188 million in the same period of 2012.
Fees on checked bags, reservation changes and other services have become a larger share of airline revenue and a big reason why the carriers are making money.
Airline revenue from bag fees — much of it for large or overweight bags — was modest during most of the last decade.
In 2008, financially strapped American Airlines expanded the fees to checking a regular bag or two, and other carriers soon matched the move.
That year, the industry's revenue from bag fees more than doubled, then doubled again the next year, and rose again in 2010.
Sixteen leading airlines reported figures that contributed to these findings.
Bag-fee revenue peaked at $3.49 billion in 2012 before falling last year.
As bag-fee revenue levels off, airlines are already looking for new sources of money.
Delta said recently that other fees such as charging extra for priority boarding, economy seats with more legroom, and upselling to first-class grew to $165 million in the first quarter of 2014, a 20 percent increase in one year.
Delta President Ed Bastian said the airline believes it can boost that figure to $500 million a year in the next three years.
At Dallas-Fort Worth International Airport, some passengers game the bag-fee system by rolling their bag through security to the gate, then checking it there, where there is usually no fee.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- U.S. adds 173,000 jobs in August, dropping unemployment rate to 5.1 percent
- Alcoa putting $60M into Upper Burrell tech center expansion
- Fifth Third Bank selling Pittsburgh branches to First National
- NexTier Bank buys Oakland’s Eureka to increase coverage in Western Pennsylvania
- Indian SUV maker Mahindra to debut electric scooter in U.S.
- Robust jobs report could force Federal Reserve to raise interest rates
- PPG’s new CEO to push organic growth with existing clients
- Stocks end roller-coaster day higher
- Macy’s prepares outlet stores
- Trib Total Media puts 9 Western Pa. newspapers up for sale
- Shale gas violations down as DEP steps up inspections