The baggage charges and the similar tiny extras billed by current airline carriers can be costly and annoying for the vacationer. But for the airline market, they are gold. They bring the market hundreds of millions, suggests a new report.
What the new study equals
A newly released report, the Amadeus Review of Ancillary Revenue Results, says luggage charges, frequent-flier programs, co-branded credit cards and similar non-transportation expenses earned the industry $21.46 billion last year.
Those that made probably the most
The airline that brought in the most non-transportation money was United Continental Airlines, which brought in $5 billion in extras. At $3.7 billion, Delta came in second. American Airlines, at $2 billion, was the 3rd largest earner. All of these are United States based companies.
Having a low budget means revenue comes from extras
More money is spent on extra fees for income at bargain airline carriers because of lower ticket costs. They lead the pack if the data is analyzed as a percentage of their total income. Of the airlines analyzed, Allegiant Airlines made 29.2 percent with these additional expenses making it the top earner. The next two involved Spirit Airlines at 22.6 percent and Ireland-based Ryanair at 22.1 percent.
Expect an increase in fees soon
Soon, non-transportation fees are sure to go up, according to co-author or the study and president of IdeaWorks Jay Sorenson. “Oil prices spiked in 2008, which was also the year in which the U.S. industry introduced baggage fees. We’re nearing those historical oil prices again, and I believe we’re going to see another round of new à la carte fees.”
A study from before
The Customer Travel Alliance, a Washington D.C.-based lobby, did a similar study earlier this year. Open Airlines for Airfare Transparency helped with the study. This means several travel agencies were involved. Air passengers paid about $36.80 in fees every round trip in 2010, according to the study.
Getting the government involves
The two groups have collected, as of last March, more than 60,000 online signatures in an attempt to urge the federal government to force flight companies to make their fees more transparent.
Citations
MSNBC
overheadbin.msnbc.msn.com/_news/2011/06/01/6764501-nickeled-and-dimed-for-21-billion
Denver Business Journal
bizjournals.com/denver/news/2011/03/10/airlines-cost-coloradans-1486m-in.html?ana=RSS&s=article_search
Business Week
businessweek.com/ap/financialnews/D9IBOU7G6.htm
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