Ancillary revenue is the amount of money an airline takes in after charging for its base airfares—also known as airline fees. It might not come as a surprise that the amount airlines get by nickel-and-diming you has been growing steadily over the past decade—but some charge (a lot) more in airline fees than others. How much? Billions.
The 10 carriers that charged the most airline fees last year collected an increased total of almost $30 billion. That number is likely to go up again this year. The latest annual airline fees report from IdeaWorks Company, the go-to source for ancillary revenue data, highlights which ones charge the most, and what they’re really charging you for.
The Airlines That Charge the Most Airline Fees
Here are the carriers that charge the most airline fees per passenger, and some key takeaways:
- Spirit: $51 per passenger
- WOW Air: $49 per passenger
- Allegiant: $49 per passenger
- Frontier: $48 per passenger
- Jet2.com: $43 per passenger
- Qantas Airways: $43 per passenger
- United: $39 per passenger
- AirAsia X: $33 per passenger
- HK Express: $33 per passenger
- Wizz Air: $31 per passenger
Low-Fare Lines Thrive on Fees
The IdeaWorks data validates the charge that low-fare lines offset rock-bottom fares by stiff fees for everything else. Spirit (47 percent of revenue is airline fees), Frontier (42 percent), and Allegiant (40 percent) derive substantial portions of their total revenues from add-on fees not related to frequent flyer revenues. Spirit’s take amounts to an astounding $51 per passenger, almost all of it a la carte fees. The other top-10 lines in terms of percentage of income derived from fees are also low-fare lines: VivaAeroBus, Wizz, Volotea, WOW, Ryanair, Volaris, and Jet2.
Baggage Is the Big Hit
In a sampling of low-fare lines, IdeaWorks found that baggage fees amounted to 40 percent of total ancillary revenue, with HK Express and WOW hitting more than 65 percent. By contrast, JinAir, which offers one checked bag without a fee, collected only eight percent of total ancillary revenue from baggage.
But the baggage scene isn’t uniform: When bag fees become a pain point for passenger, some lines listen. Last year, Ryanair modified its fare structure to offer a fairly low five euro (about $6) fee that bundles priority boarding and one free 22-pound cabin roll-on bag. Wizz also dropped its carry-on fee. Both lines reported drops in fee revenue but apparently decided that more customer-friendly fees improved overall sales.
Spirit Piles It On
A staggering 33 percent of Spirit’s ancillary revenue comes from its fee for online booking: The only way to avoid this airline fee is to schlep to an airport and buy when ticket agents are there. Another 11 percent comes from seating fees, which you have to pay if you want to choose your seat.
Spirit’s reputation of heavy-handed fee policies seems well deserved, but Allegiant, too, socks you with a fee to book online—despite the fact that online booking costs an airline far less than an in-person transaction.
Fees Can Ruin a Deal
For a typical traveler, hefty fees can offset what initially appears to be a really low fare. IdeaWorks looked at fares for the top transatlantic route, New York to London, on four lines. The lowest base-level fares were on American ($334), Norwegian ($239), United ($334), and Virgin Atlantic ($412).
Then, IdeaWorks looked at what a typical leisure traveler who would likely want or need to check one bag (22 pounds or less), have a meal, and get an advance seat assignment would have to pay. The American fare rose slightly to $358, Norwegian jumped by $150 (to $385), United remained the same, and Virgin Atlantic spiked by $80 (to $492).
Norwegian’s big fare advantage turned out to be a disadvantage, compared with both American and United, due mainly to high baggage and meal fees. United’s “win” is based on its current policy of including seat assignment in the base fare; a policy the airline says it might change.
The Southwest Hype Is Real
Southwest generates a top 79 percent of its revenue through its frequent flyer program. Its 21 percent of revenue from baggage checking and other “a la carte” fees is by far the lowest of the top 10, and it validates Southwest’s marketing claims about charging a lot less in fees than its domestic competitors.
Airline Fees and Fare Transparency
The IdeaWorks report pretty much sums up the role of fees in the airline marketplace by saying “it’s hard to skip the extras.” Most travelers, especially on longer trips, need to check or carry on a bag of 22 pounds or less—most will want something to eat, and many will want to avoid being stuffed into a middle seat after others have paid for assignment to all the window and aisle seats. So it increasingly seems you need to get past the low-ball fares and instead check the prices for what you really intend to buy—a feature that booking sites like Google Flights are moving toward.
This, by the way, is one of the key points bothering many consumer advocates about the current FAA reauthorization bill: It could allow airlines to advertise and post fares that exclude mandatory taxes and fees. But the fight is still going on.
More from SmarterTravel:
- The Best and Worst Airports in the World, Ranked
- Google Flights Now Warns of Bag Fees
- FAA Says ‘No’ to Roomier Seats
Consumer advocate Ed Perkins has been writing about travel for more than three decades. The founding editor of the Consumer Reports Travel Letter, he continues to inform travelers and fight consumer abuses every day at SmarterTravel.
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