May 3, 2010 in Business

Airlines made $7.8 billion from fees last year

Associated Press
 

NEW YORK — The government today confirmed what many travelers might have already suspected: U.S. airlines made a lot more money in fees last year.

The Department of Transportation said revenue from so-called ancillary fees was $7.8 billion last year, up 42 percent compared with 2008, the year baggage fees were introduced.

The biggest chunk of the fees came from checked baggage. The first baggage fees appeared in 2008 when oil prices soared to a record high $147 per barrel.

Besides checked bags, DOT said airline fees include reservation changes, pets, seating assignments, food and drink sales, pillows and blankets and mileage sales.

United and Continental, which on Monday announced plans to combine, were sixth and seventh among carriers in fees collected, with $619.5 million and $539.7 million, respectively.

Delta, the world’s largest airline, collected the most revenue from fees at $1.65 billion. American was second, followed by US Airways.

Southwest, the only major airline that doesn’t charge for the first two checked bags, was fourth in the fee rankings. Southwest, which carries more passengers than any other U.S. airline, charges $50 for a third checked bag, as well as fees for pets traveling in the cabin and unaccompanied minors.

While discount carrier Spirit Airlines didn’t make the top 10, 21 percent of its total operating revenue came from extra fees — more than any other carrier. Besides bag fees, Spirit charges for seat assignments, drinks, snacks, pets and kids traveling alone. It will start charging as much as $45 for a carry-on bag as of Aug. 1.

In the last three months of the year, revenue from airline fees rose 18 percent to at least $1.9 billion. Bag fees totaled $736 million in the October-to-December period.

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