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Airline-Fee Revenue up 21 Percent to $38.1 Billion

SmarterTravel

If you’re feeling nickel-and-dimed by the airlines, you’re not alone. Air travelers were dinged for $38.1 billion in nuisance fees last year.

That’s according to the latest report by IdeaWorks, issued this week. (Note that only 63 of the 130 airlines reviewed by IdeaWorks reported their fee revenue separately, so the actual total for the industry would be much higher.)

Last year’s fees amounted to a stunning 21 percent increase of the previous year’s, and were the eighth consecutive year of substantial increases.

Fees charged by ultra-low-cost carriers were especially robust, up more than 32 percent year-over year.

Of the world’s airlines, U.S. carriers imposed the most fees. United was first, with a reported $5.9 billion in fees for the year, followed by American/US Airways at $4.7 billion, and Delta at $3.2 billion.

When will it end? Not anytime soon, and for the most compelling of reasons. The airlines have become addicted to the extra fees, increasingly depending on them to generate profits. And Wall Street, which sees the fees as a sure road to higher shareholder returns, is encouraging the airlines to expand and increase them. (The day the IdeaWorks report was released, Delta’s stock price surged 2.12 percent, presumably in response to analysts’ reckoning that increased fees and increased profits would go hand-in-hand.)

For the foreseeable future, fees are the new normal.

Reader Reality Check

How much extra in fees do you now spend on your trips by air?

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This article originally appeared on FrequentFlier.com.

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