Airlines collected record baggage fees in 2012

NEW YORK — U.S. airlines collected more than $6 billion in baggage and reservation change fees from passengers last year — the highest amount since the fees became common five years ago.

Passengers shouldn’t expect a break anytime soon. Those fees — along with extra charges for boarding early or picking prime seats — have helped return the industry to profitability.

Airlines started charging for a first checked suitcase in 2008 and the fees have climbed since. Airlines typically charge $25 each way for the first checked bag, $35 for the second bag and then various extra amounts for overweight or oversized bags.

The nation’s 15 largest carriers collected a combined $3.5 billion in bag fees in 2012, up 3.8 percent from 2011, according to the Bureau of Transportation Statistics. Fees for changing a reservation totaled $2.6 billion, up 7.3 percent.

The airlines took in $159.5 billion in revenue last year and had expenses of $153.6 billion, according to the government. That 3.7 percent profit margin comes entirely from the baggage and change fees.

Delta Air Lines once again took in the most fees — $865.9 million from baggage alone — but it also carried more passengers than any other airline.

Delta collected $7.44 per passenger — about average for the industry. Low-cost carrier Spirit Airlines collected the most, an average $19.99 per passenger in baggage fees last year.

The government only requires the airlines to report revenue from baggage and change fees.

Passengers can expect to pay even more this summer.

American Airlines, Delta, United Airlines and US Airways all recently raised the fee for changing a domestic flight reservation from $150 to $200.

Even Southwest Airlines, which promotes its lack of change fees and “bags fly free” policy, recently announced a new policy on no-shows. Passengers who buy the cheapest tickets will have to cancel a reservation before departure; otherwise they won’t be able to apply credit from the missed flight toward a later trip.

Many fees were first introduced to allow airlines to offset rising fuel costs. In 2008, jet fuel spiked 46 percent to an average $3.06 per gallon as the price of oil hit an all-time high.

Airfares have climbed in recent years but jet fuel remains costly — in 2012, the airlines paid an average of $2.96 a gallon. Passengers have shown reluctance to book tickets if the base fare is too high, hence the introduction of more fees — collectively referred to in the industry as ancillary revenue.

Besides baggage and change fees, airlines are charging fees for extra legroom, the ability to skip security lines and for premium meals.

But the airlines are being aggressive about expanding those fees. United recently said in an internal newsletter that it hopes to collect $19.29 in average ancillary revenue per passenger by the end of 2013, up 9.1 percent from the amount it collected last year. JetBlue, which doesn’t charge for the first checked bag, took in a record $22 per passenger in other fees in the first quarter, up 3 percent from the year-ago quarter.

Airlines are also increasing certain fees depending on demand.

Thanks to a computer upgrade, United can now charge passengers different prices to upgrade to an Economy Plus seat, which has more legroom, depending on the route, day of the week, time of day and the location of the seat. The airline said it increased the dollar value of those seats 25 percent in 2012.

More in Herald Business Journal

Snohomish inventor makes changing beds magical

He hopes to make his big push in the hotel industry, where injuries to housekeepers are increasing.

Boeing planes designed for Alaska to make final flights

The special Boeing 737-400s carry cargo in the middle of the plane and 72 passengers in the rear.

Monroe’s Canyon Creek Cabinet names new exec VP

Mark Kovich has joined Monroe-headquartered Canyon Creek Cabinet Company as the executive… Continue reading

Century 21 North Homes Realty adds new agent in Lynnwood

Century 21 North Homes Realty has welcomed Adriene Crum to its Lynnwood… Continue reading

Longtime Comcast Everett employee travels to aid Houston

Lake Stevens resident and longtime Comcast Everett employee Brandon Johnson traveled to… Continue reading

Emory’s fun run raises $2,000 for Housing Hope, Beck’s Place

Proceeds from the 1st Annual Emory’s Silver Lake Fun Run on Labor… Continue reading

Happy accident leads Edmonds couple to make Hunniwater drink

The latest line of energy drinks by Karin and Eric… Continue reading

Single payer is no panacea for our costly health care system

We must address the cost of health care before designing an insurance system.

Voters are on the sidelines as the port fills a vacant seat

Troy McClelland resigned from the Port of Everett commission too late for an election before 2019.

Most Read