Airlines appear determined to continue to present to prospective passengers cheap fares, whether cheap airplane tickets or cheap vacation packages. Airlines are hesitant, if not downright petrified, to increase their base fares. Instead they continue to increase fees as a way of improving their bottom lines.
American airlines collected $1.5 billion in baggage and ticket change fees in the third quarter. That is an increase of $143 million from the same quarter a year ago and up over $11 million from the second quarter of this year.
Year to date airlines charged more than $4.3 billion in bag and change fees, according to the federal Bureau of Transportation Statistics (BTS). This figure only includes two types of fees. Other fees, derived from charges for things like seat assignments, early boarding and in flight sales of food, drink, pillows, blankets, and entertainment are reported in a different category with other items which the BTS is currently unable to break out separately.
Delta, which became the nations largest airline, once it merged with Northwest, generated almost $1.3 billion in combined bag and change fees through the end of the third quarter. United and Continental together charged over $922 million in baggage and change fees. American collected over $784 million in those fee categories in the first nine months of the year.
Most airlines charge non elite customers to check any bag. Spirit is currently the only airline to charge for both carry-on and checked bags.
Airline fees are expected to climb over time both as a result of charging more for the same services, such as checking bags, and continuing to become creative in charging for services such as priority boarding and preferred seating.
US Airways recently acknowledged that in 2010 fees will represent 100% of profitability. US Airways is forecasting to raise $500 million in ancillary fees and expects profits of between $450 and $475 million for the year.
www.cheapfares.com