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Updated: 9:14 p.m. Monday, Dec. 14, 2009 | Posted: 9:14 p.m. Monday, Dec. 14, 2009

Extra fees for airlines climb

Feds report 6.9 percent of airlines’ total revenue in 3Q came from add-on fees.

By Tim Tresslar

Staff Writer

Airlines in the third quarter charged passengers at least $2 billion in fees to transport baggage, change reservations or carry pets, up 36 percent over the prior year, federal officials said Monday, Dec. 14.

So-called “ancillary fees” also made up a bigger portion of total revenues for the 26 airlines that collected the fees, according to the U.S. Dept. of Transportation’s Bureau of Transportation Statistics. In the third quarter 2009, such fees climbed to 6.9 percent of the total revenue for those airlines, versus 4.1 percent of the airlines’ total revenue during the year-ago quarter.

The airlines took in $740 million in baggage fees, $614 million from reservation-change fees and $601 million in other ancillary fees such as for transporting pets, the bureau reported.

Delta Airlines, which flies out of Dayton International Airport, collected $447.5 million in ancillary fees in third quarter 2009 — the most of any carrier when measured in dollars, BTS officials said. This marks a nearly 71 percent gain over last year when Delta took in $262.2 million in fees, BTS officials said.

Susan Elliott, a Delta spokeswoman, said the entire airline industry has gravitated toward an a la carte fee structure, and Delta remains competitive with other carriers.

“These a la carte fees aren’t necessarily geared toward our most loyal customers,” she said. “They typically apply to those customers that choose to fly Delta on a less consistent basis.”

The second highest, American Airlines, reported revenues of $261.2 million from ancillary fees, up nearly 8 percent from revenues of $242.5 million during third quarter 2008. U.S. Airways reported ancillary fee revenue climbed 78 percent to $230.8 million, up from $129.6 million a year ago, the federal agency reported.

Mike Boyd, president and chief executive officer of Boyd Group International Inc., a consulting firm, said carriers aren’t gouging customers. Rather, they need the revenues from fees to compensate for money lost through double-digit declines in air fares, he said.

“When you hear all this stuff about ancillary fees, they’re trying to make up for lost financial time,” he said.

While airlines need the revenue from the ancillary fees, they have done a bad job making that case to the public, Boyd said.

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