October 28, 2011 in Business

For major airlines, money is in the bag

Top carriers’ fees increase 8 percent
Hugo Martin Los Angeles Times
 
Associated Press photo

Passengers who are taking bags with them on their trips have helped fill the coffers of airlines as the country’s largest airlines collected $1.5 billion in fees from checked luggage and reservation-change charges in April, May and June.
(Full-size photo)

LOS ANGELES – While the nation’s airlines continue to blame higher fuel costs for cutting into profits, the industry continues to pocket hefty revenue from fees.

The country’s largest airlines collected $1.5 billion in fees from checked luggage and reservation-change charges in April, May and June, according to the U.S. Bureau of Transportation Statistics.

The fees collected for the second quarter represent a 1 percent increase from the same period last year and were up 8.5 percent from the previous three months, according to the bureau.

These are the only fees paid by passengers that airlines are required to disclose to the federal agency. All other fees paid by passengers are combined in larger categories with other types of revenue.

In July, the U.S. Department of Transportation proposed a new rule, requiring airlines to report 16 additional categories of fees, such as food, in-flight entertainment and seat upgrade charges. The airlines have opposed the proposed rule, saying it would impose too much of a burden on the industry.

In the past few days, several airlines have released new earnings reports that show higher fuel costs have cut into what otherwise would have been healthy profits.

United Airlines reported a drop in earnings Thursday for the third quarter, blaming fuel costs that grew by 41 percent from last year.

Last week, the parent company of American Airlines reported a third-quarter loss of $162 million, or 48 cents a share, attributing it mostly to higher fuel costs and unfavorable foreign-exchange rates.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email