Tags: bag | fee | profits | airlines

Bag Fee Profits Soar: Airlines Raked in $900M in Second Quarter of 2014

By    |   Tuesday, 23 Sep 2014 06:54 AM

Airline profits are getting a boost from checked bag fees, so expect them to keep rising along with ticket prices, reservation change fees, and other unpleasantries.

Yahoo Finance reported that U.S. airlines collected $900 million in baggage fees in the second quarter this year — a 3 percent increase from the year before. The airlines also raked in $753 million in reservation change and cancellation fees, a 4.7 percent increase. The biggest increase, however, was in ticket fares, which are up 8.2 percent.

The two airlines to watch out for are Delta and United, which charge the most fees overall, taking in an average of roughly $40 per passenger per flight.

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JetBlue, which averages $22, was among the larger companies with fewer fees, and allows one free checked bag currently. Bloomberg Businessweek reported last week, however, that CEO David Barger will step down in February to make way for President Robin Hayes. Hayes is predicted to be more focused on shareholders than passengers, so don't be surprised if fees go up at JetBlue.

Southwest is the most customer friendly airline currently, as it allows two checked bags free with each flight.

"Bag fees are not in the equation," Southwest spokesman Dan Landson said Monday.

When it comes to business expenses on the airline side, the Bureau of Transportation Statistics found that fuel costs remained flat, while labor costs rose roughly 8 percent. Roughly 87 percent of all seats were full across the industry, setting a new record in efficiency.



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Airline profits are getting a boost from checked bag fees, so expect them to keep rising along with ticket prices, reservation change fees, and other unpleasantries.
bag, fee, profits, airlines
276
2014-54-23
Tuesday, 23 Sep 2014 06:54 AM
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