Delta will get $1 billion in baggage fees by 2014

Thursday, June 7th, 2012 By

Delta Airlines plane

Delta Airlines, the biggest baggage fee collector of them all, will have a $1 billion haul in baggage fees by 2014. Photo Credit: Cubbie_n_Vegas/Wikimedia Commons/CC-BY

Delta Airlines is going to be the first major air carrier to collect $1 billion in airline fees, as it will collect that much by 2014. Many consumers are unhappy with the mounting fee schedules, but the air travel industry will cease to exist without them.

Already the largest fee collector

The air travel industry in the United States is rapidly becoming known for collecting baggage and other fees. According to a New York Times article re-posted on MSNBC, the airline industry collected $3.36 billion in baggage fees last year, compared to $464.3 million in 2007.

The leader in charging baggage fees was Delta Airlines, according to Time magazine. The airline collected $863 million from baggage fees in 2011, alongside an additional $767 million in service charges for canceled reservations and changing flights. The airline is also scheduled to be the first to collect $1 billion from baggage fees alone, which it will accomplish by 2014.

Fees headed to stratosphere

In the first three quarters of 2011, Delta took in $814 million in ancillary fees, which includes anything over the cost of a ticket like baggage fees and charges for pet transportation, reservation changes and so forth. It was the most of any airline; the next highest amount in ancillary fees was $300 million, collected by American Airlines. Delta’s haul was more than American, US Airways and Southwest, combined.

Some of the fees seem egregious. Charging a premium for assigned seats, aisle and window seats has led to some families being told to pay extra to sit together while traveling, according to Reuters, which is ruffling some feathers. It’s part of “unbundling,” the term airlines are using to describe an a la carte approach to service. If a person wants more than just a seat for their posterior somewhere in an airplane, they have to pay extra; business and first class travelers won’t mind, as they are accustomed to paying a premium.

Several airlines are mulling an oversized bag fee, according to MSNBC, in case a passenger brings a bag too big to fit an overhead bin. Alaska airlines already charges $25 for doing so, as the bag has to be checked.

Gouging or trying to keep up

Airlines are businesses; if their costs of doing business go up, they cannot be expected to sell their services at a perpetual loss just because. Passing on costs is their only recourse if they don’t want to go out of business.

According to CBS Local Minnesota, it currently costs $77 in fuel to transport the average traveler the distance of the average flight, a 227 percent increase from 12 years ago. By contrast, the average fare in 2011 was $368, according to Bureau of Transportation Studies data, compared to $290 in 1995. However, $368 adjusts to $247 in 1995 dollars, meaning we are paying less for flights today. All of the largest carriers have filed for bankruptcy in the past decade.

Sources

MSNBC

Time

Reuters

CBS Local Minnesota: http://minnesota.cbslocal.com/2012/06/04/good-question-do-airlines-really-need-fee-money/

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