Image Image Image Image Image Image Image Image Image Image
Scroll to top

Top

No Comments

New DOT Report Confirms Airlines’ Addiction to Ancillary Fees

New DOT Report Confirms Airlines’ Addiction to Ancillary Fees

The DOT’s Bureau of Transportation Statistics yesterday released its report on U.S. airlines’ 2012 financial performance, including data on individual carriers’ operating margins, profit, operating costs, and both total revenue and revenue from baggage fees and cancellation fees.

According to the report, total revenue for all U.S. airlines in 2012 was $159.5 billion. Of that, $6.1 billion was from bag fees ($3.5 billion) and change/cancellation fees ($2.6 billion). That’s about 3.8 percent, and the percentage would be higher if all “ancillary fees” were factored in. (The DOT only collects data on bag and change fees. Fees for food, drinks, inflight entertainment, preferred seating and the like are not reported separately.)

At the top of the list was Delta, which collected $865.9 million in bag fees and $778.4 million in cancellation/change fees, for a total of $1,644.3 billion, or about 4.3 percent of its $36.8 billion in operating revenue for the year.

Delta is also the country’s largest airline, in terms of passenger traffic, so it’s no surprise that its fee revenues were the highest. In percentage terms, they were in line with other mainline carriers’.

Spirit, on the other hand, charged $168.2 million in bag fees and $27.8 million in change fees, for a total of $196.0 million, accounting for almost 15 percent of its $1.3 billion in operating revenue.

Bag fees for the year were as follows (in thousands):

  • Delta $865,879
  • United $705,547
  • American $557,385
  • US Airways $516,206
  • Spirit $168,229
  • Alaska $151,475
  • Southwest $144,475
  • Allegiant $89,556
  • JetBlue $70,788
  • Frontier $70,173
  • Hawaiian $67,829
  • Virgin America $57,410
  • Sun Country $14,473
  • AirTran $4,183
  • Mesa $3,326
  • USA 3000 $2

Outlook: More Fees, Higher Fees

The 2012 bag fees were up 3.8 percent over the previous year, and change fees increased even faster, at a 7.4 percent rate.

There’s no sign of the airlines’ fee-for-all abating anytime soon.

The mainline carriers recently increased change fees to as much as $200 for domestic itineraries. And Frontier has announced upcoming fees for carry-on bags and for non-alcoholic beverages.

The outlook: more and higher fees ahead.

Other Posts of Interest

Stay in Touch

For more news like this, sign up to receive our free weekly newsletter. You can follow us on Twitter and Facebook, too.