U.S. airlines collect $5.7 billion in fees

WASHINGTON Mon Jun 13, 2011 4:19pm EDT

A passenger waits for his flight near a Delta Air Lines logo at Detriot Airport November 20, 2010. REUTERS/Sim Wei Yang

A passenger waits for his flight near a Delta Air Lines logo at Detriot Airport November 20, 2010.

Credit: Reuters/Sim Wei Yang

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)

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Comments (2)
Viscount800 wrote:
Airlines levy fee on top of fee these days. The fees the airlines pay to the credit card companies total hundreds of millions per year .. and as explained in this video the airlines could actually be re-direct the credit card fees back to the passengers … if they wanted to…

http://www.youtube.com/watch?v=WdOkHXw56rs

Jun 14, 2011 9:01am EDT  --  Report as abuse
DrJJJJ wrote:
Completely reasonable and fair I would argue! Those with extra bags/weight/space needs, pay extra! Also, creative/fair way to keep companies in the black! Anyone else want to travel on an airline/plane operating in the red? Anyone desire to be in business without a profit? Didn’t think so!

Jun 14, 2011 4:11pm EDT  --  Report as abuse
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