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Airlines collect $3.4 billion in 2010 baggage fees

June 15, 2011|By Hugo Martín, Los Angeles Times

The nation's largest airlines collected $3.4 billion in fees charged to passengers for checking luggage last year, a 24% increase over 2009, according to new federal data released Monday.

The baggage fees are not the only extra revenue collected by airlines. The airlines last year also took in $2.3 billion in fees charged to passengers to change reservations, down about 3% from the previous year, according to the U.S. Bureau of Transportation Statistics.

The agency has yet to calculate other miscellaneous airline revenue for 2010, including charges for in-flight food and beverages, and fees to board early, to access in-flight Wi-Fi services and to transport pets, among other charges.

Delta Air Lines collected the most in baggage fees in 2010, $952 million, followed by American Airlines with $581 million, according to the statistics.

Most of the nation's major airlines began to adopt such fees in 2008 to offset a sharp drop in demand, particularly among business travelers, in the midst of one of the worst recessions in a generation.

Even though demand for airline seats has increased and ticket prices are near pre-recession levels, the nation's airlines continue to charge such fees, which now represent about 6% of the industry's revenue.

"Most airlines have acknowledged that it is part of the business model that is, more or less, here to stay," said Tim Smith, a spokesman for American Airlines.

He added that the extra fees have helped the industry offset higher prices for fuel, which increased 27% in March over the same month last year.

In the first three months of this year, fuel costs have replaced salaries and benefits as the top cost category at AMR Corp., the parent company for American Airlines and regional air carrier American Eagle Airlines, Smith said.

For that period, the cost of fuel for AMR was $1.84 billion, compared with $1.72 billion for salaries and benefits, he said.

hugo.martin@latimes.com

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