Baggage fee revenue declines for US Airways, other carriers

Luggage fees have become a major force in airline profitability. US Airways collected $506 million in baggage fees in 2011. RICK MAIMAN / Associated Press
Luggage fees have become a major force in airline profitability. US Airways collected $506 million in baggage fees in 2011. RICK MAIMAN / Associated Press
Posted: May 19, 2012

NEW YORK — U.S. airlines’ revenue from bag fees fell last year for the first time since they started collecting them, signaling that more passengers are packing light to save cash when they fly.

The Transportation Department said Thursday that the 17 largest airlines made $3.36 billion in bag fees last year, down slightly from $3.40 billion in 2010.

The total number of passengers last year on those airlines rose by about 2.4 percent.

Fees for first and second checked bags began four years ago, when fuel prices soared to all-time highs. But many airlines added charges for extra heavy or oversize bags before then.

The revenue airlines collect has been climbing ever since. Between 2008 and 2009, money from bag fees jumped by 42 percent. From 2009 to 2010, it increased by 24 percent.

Delta Air Lines Inc. made more than any of its peers last year with $863.6 million in bag fees. That was more than the $854 million in net income that the world’s second-largest carrier posted, highlighting how vital the fees have become.

For American Airlines, at No. 2, fees saved it from an even wider loss. The airline made $593.5 million in fees last year. Parent company AMR Corp. posted a $2 billion net loss.

US Airways, the dominant airline at Philadelphia International Airport, collected $506.3 million in baggage fees in 2011 — down from $513.6 million the previous year.

Spirit, the only U.S. airline that charged for carry-on bags last year, was eighth on the list, raking in $134 million in fees. That was double what the next airline collected. JetBlue brought in just $64 million even though it has nearly four times the traffic of Spirit.

JetBlue does not charge passengers for the first checked bag.

Fees for reservation changes and cancellations rose 4 percent to $2.38 billion in 2011.

Bag fees and reservation change fees are the only ancillary fees paid by passengers that are reported to the federal Bureau of Transportation Statistics as separate items. Other fees, such as revenue from seat assignments and onboard sales of food, drinks, pillows, blankets, and entertainment, are not identified separately.

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