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The Airlines Are Rolling in Profits, and Fee Dough

How are U.S. airlines doing? Very well, thanks.

As a group, the 26 U.S. airlines racked up their eighth consecutive quarterly net profit, according to the latest report from the DOT’s Bureau of Transportation Statistics. And a whopping profit it was, too: $3.1 billion.

Total revenue for the 1st quarter was $39.1 billion. Of that, $864 million was from baggage fees, and $768 million was from reservations-change fees. That’s around 4.2 percent of total revenue attributable to just two of the many fees currently charged by the airlines. If all fee revenue were factored in, the contribution would be much higher. (For reasons best known to the DOT, those are the only two fees tracked separately.)

In fact, the big story is the airlines’ increasing dependence on “ancillary revenue,” as fee income is referred to in industry-speak. While airfares were up a modest 2.4 percent for the period, bag fees spiked 9.2 percent, and reservations-change fees increased 5.8 percent.

Fuel costs, on the other hand, were down a whopping 29.5 percent year over year.

For savvy travelers, who want to keep their trip costs under control, the fee revenues highlight the savings to be enjoyed from beating the airlines at their own game. Carry on your gear, to avoid the checked-bag fee. And don’t make speculative bookings, to avoid the charges imposed for changing a reservation.

For now, the fee-for-all continues.

Reader Reality Check

Do you feel nickel-and dimed by the airlines, or have you resigned yourself to the new fees?

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