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Airlines to rake in record $57 billion in passenger fees this year

Airlines to rake in record $57 billion in passenger fees this year

Airlines to rake in record $57 billion in passenger fees this year
November 28
06:50 2017


A ground operations employee loads baggage onto a Southwest Airlines plane at John Wayne Airport in Santa Ana, California.

Patrick T. Fallon | Bloomberg | Getty Images

A ground operations employee loads baggage onto a Southwest Airlines plane at John Wayne Airport in Santa Ana, California.

Travelers who value such comforts as legroom, a checked bag, a blanket to keep warm, dinner or sitting beside their loved ones during a flight are a goldmine for airlines.

Airlines this year will turn those preferences into a record $57 billion this year, according to a study on carriers’ fees that was released Monday.

In total, airlines around the world will bring in a record $82.2 billion in fees to passengers and revenue from selling frequent flier miles to banks, among other sources aside from ticket costs, said the study by consulting firm IdeaWorks Company and online car-rental site Cartrawler. The amount is more than triple the sum of airlines’ ancillary revenue in 2010, according to the study.

“It’s reasonable to suggest ancillary revenue will someday exceed the airline industry’s annual fuel bill,” it said.

Passengers’ willingness to pay for more perks amid historically low fares has been a point of pride for some carriers.

Delta Air Lines and American Airlines executives recently said that about half of passengers are willing to pay a higher fare than fly on the carriers’ bare-bones basic economy class, which is often in the same cabin but denies passengers once-free perks like seat selection, and — in American and United Airlines‘ case — access to overhead bins.

Airlines in recent years have also introduced new ways to entice passengers to shell out more, such as fees for faster boarding and day passes at their airport lounges.

While some domestic round-trip airfares have dropped to double-digit prices, fees may have canceled out some of that benefit, according to a report by the Government Accountability Office published in September. The GAO said research showed that passengers charged separately for checked bags pay more on average than those for whom checked luggage is included in the cost of the ticket.



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