Passenger fees and other extra charges generated $27.1 billion for airlines around the world in 2012, with major carriers like United, Delta and American airlines leading the revenue race.
The latest revenue total, collected by 53 airlines around the globe, is a 20% increase over the $22.6 billion collected by 50 carriers in 2011, according to a new report by IdeaWorks Co., a Wisconsin consultant on airline fees. The study was sponsored by CarTrawler, a Dublin, Ireland-based provider of car rental distribution systems.
Extra charges such as baggage fees and fees to upgrade to roomier seats have become a major source of revenue for airlines since 2008, when surging fuel prices forced airlines to find another way to generate money without raising airfares.
Low-cost airlines, such as Spirit Airlines and Allegiant Air, led the high-fee, low-fare trend over the last few years. But the IdeaWorks study says that major carriers, particularly big airlines in Europe, are increasingly turning to passenger fees to boost revenue.