Annoyed by the niggling fees airlines charge for seemingly everything? Best get used to them.
The airline fee-for-all continues escalating at a dizzying pace, with travel consumers increasingly accepting of the nuisance fees that have become an ever-more unavoidable part of the airline-booking landscape.
According to the newly released 2016 Top 10 Airline Ancillary Revenue Rankings report from IdeaWorks, the top 10 airlines generated $2.1 billion in so-called ancillary revenue in 2007. In 2016, the fee total for the top 10 carriers had exploded, to more than $28 billion.
The data can be sliced and diced in a variety of ways, but perhaps the most telling view is of the average amount collected from each passenger in ancillary revenue, the industry term for fees over and above the basic airfare. Among the 138 airlines whose financials were examined for the report, the 10 airlines charging the highest per-passenger fees were as follows:
- Spirit – $49.89
- Allegiant – $48.93
- Frontier – $48.60
- United – $43.46
- Jet2.com – $42.46
- Qantas – $42.38
- Virgin Atlantic – $42.25
- AirAsia X – $34.41
- Korean – $32.59
- Alaska Air – $31.41
Importantly, the breakdown among different types of ancillary revenue varies considerably among airlines, reflecting different carriers’ differing business models. For United, for example, around half of the $43.46 per passenger in ancillary revenue is fees related to frequent-flyer program participation, mostly in the form of revenue United collects from the companies issuing its co-branded credit cards. By contrast, the fees collected by Spirit are overwhelmingly for bags, reserved seats, and the like. So while the per-passenger revenue may be similar, Spirit is collecting much more directly from the passenger than United.
The takeaway for consumers is straightforward. It’s no longer enough to simply consider published airfares when comparison shopping. What matters is the all-in price, including fees for checked bags and assigned seats and anything else you might require to make the flight bearable.
Fun fact: In Australia, 35 percent of credit-card spend is on Qantas co-branded credit cards.
Reader Reality Check
How do you feel about the new normal: fees for this, that, and everything?
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After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.
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