Nicaragua has granted a Hong Kong company the right to build a $40 billion interoceanic canal. Slideshow
U.S. airlines collect $5.7 billion in fees
WASHINGTON (Reuters) - U.S. airlines collected 10 percent more in fees last year to check bags and change reservations, raising more than $5.7 billion that helped them hold down losses from sharply higher fuel costs.
Delta Air Lines topped both categories, accounting for more than a fifth of the total that was compiled and released by the Transportation Department on Monday.
American Airlines, a unit of AMR Corp, was second overall followed by United Airlines and Continental Airlines, which are now merged. Combined, those two carriers would top Delta in the generation of ancillary revenue.
The overall airline revenue picture for last year was known to investors in January. But carriers do not as a rule break out fees for bags, reservation changes, and other services when reporting quarterly results.
Most big airlines charge up to $25 for the first checked bag and more for a second. The practice began as a revenue bridge when travel fell sharply during the 2008-09 recession and fare increases were hard to pull off.
But ancillary fees, including those to change reservations, have stuck and are now an important part of the revenue stream for airlines wrestling with high fuel costs and trying to keep their recovery aloft.
Additionally, transparency on bag fees and fares is a hot-button issue.
U.S. airlines want the government to push back deadlines requiring easily accessible bag fee and fare information as well as a mandate to boost compensation for passengers involuntarily bumped off flights.
Those summer and fall deadlines were included in a rule finalized in April and driven by consumer and political frustration with airline service, including flight delays and complaints about the true cost of travel.
Trade groups for major, low-cost and regional carriers last week asked the Transportation Department to delay compliance until as late as next spring in certain cases so airlines can train employees and update information technology systems.
(Reporting by John Crawley, editing by Maureen Bavdek and Matthew Lewis)
- Tweet this
- Share this
- Digg this