Cheap airplane tickets and cheap vacation packages seem here to stay. The trick is figuring out in advance what will be the final cost of your trip. U.S. airline collected almost $2.6 billion in baggage fees in the first three quarters of the year, up 29 percent over the year before.
Airline experts are predicting that the U.S. airline industry will post a $4 billion profit this year. Given that the industry took in $4.3 billion in fees for checked bags and reservation changes alone during the first nine month of the year, you can easily see how important fees are to the airlines.
Earning healthy profits this year, is not indicative of what experts are projecting in the future. The International Air Transport Association (IATA) is projecting that the global airline industry will make $15.1 billion in profits this year, but that its profits will fall to $9.1 billion in 2011 because of slowing economic growth and increasing oil prices.
While a $9 billion profit may sound impressive, it equates to a razor thin profit margin of only 1.5 percent that the IATA CEO calls pathetic.
All signs are that the importance of ancillary fees will only grow. Existing fees are expected to be raised and new fees developed leaving travelers to sift through the results to determine the actual cost of their travel.
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