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Airlines collect $1.5 billion in luggage, reservation change fees

The second-quarter figure represents an 8.5% jump from the previous three months and a 1% increase from a year earlier, according to U.S. Bureau of Transportation Statistics.

October 27, 2011|By Hugo Martín, Los Angeles Times
  • A worker pushes luggage carts at LAX.
A worker pushes luggage carts at LAX. (Francine Orr / Los Angeles…)

While the nation's airlines blame higher fuel costs for cutting into profits, the industry continues to pocket hefty revenues from fees.

The country's largest airlines collected $1.5 billion from checked luggage and reservation change fees in April, May and June, according to data released Thursday by the U.S. Bureau of Transportation Statistics.

The fees collected in the second quarter represented an 8.5% jump from the previous three months and a 1% increase from the same period last year, according to the bureau. Delta Air Lines led all carriers, collecting nearly $430 million in fees for the quarter, according to the bureau.

The statistics were released as several airlines disclosed their latest earnings reports. Most carriers reported growing demand in the third quarter but said higher fuel costs cut into what otherwise would have been healthy profits.

United Airlines reported a drop in earnings compared with the same period last year, blaming higher fuel costs.

For the quarter, revenue per available seat mile — a key industry indicator of success — increased 10% over the same period last year, according to the airline. Meanwhile, fuel costs jumped 41%, or $1 billion.

Last week, the parent company of American Airlines reported a third-quarter loss of $162 million, or 48 cents a share, attributing it mostly to higher fuel costs and unfavorable foreign-exchange rates.

Still, passenger advocate groups blasted the airlines for continuing to increase fees, charged on top of higher airfares.

"Passengers most certainly have not resigned to the fact that airlines continue to nickel-and-dime them when traveling," said Brandon Macsata, executive director of the Assn. for Airline Passenger Rights, a Washington-based group. "In fact, most passengers have expressed outrage that the airlines levy these fees yet customer service has continued to lag."

The charges to check luggage and change reservations are the only fees airlines are required to disclose to the federal agency. All other fees are combined in larger categories with other types of revenue.

In July, the U.S. Transportation Department proposed a new rule requiring airlines to report 16 additional categories of fees, such as food, in-flight entertainment and seat upgrade charges. The airlines have opposed the proposal, saying it would impose too much of a burden on the industry.

hugo.martin@latimes.com

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