Airline Fee Revenue Soars

Airline fee revenue is growing and here to stay. The airline industry collected at least $1.9 billion through ancillary fees in the fourth quarter of 2009, up 18.3 percent from the fourth quarter of 2008, the Department of Transportation's (DOT) Bureau of Transportation Statistics (BTS) reports. The ancillary fees constituted 6.5 percent of the total revenue of the 32 carriers that reported receiving such fees. For the year, the carriers collected $7.8 billion in ancillary fee revenue, compared to $5.5 billion in 2008.

From October to December, the airlines collected $736 million in baggage fees, $564 million from reservation change fees, and $611 million from other ancillary fees, such as pet transportation fees and frequent flyer award program mileage sales. Revenue from seating assignments and on-board sales of food, drink, pillows, blankets, entertainment, or any other ancillary items are reported in a different category, the BTS says.

Delta Air Lines collected $425.7 million in the fourth quarter ancillary fees, the most of any carrier, while 21.0 percent of Spirit Airlines’ operating revenue came from ancillary fees, a larger percent than any other carrier.

In 2009, the airlines collected $2.7 billion in baggage fees, $2.4 billion from reservation change fees, and $2.7 billion from other ancillary fees, such as pet transportation fees and frequent flyer award program mileage sales. Delta collected $1,647.6 million in annual ancillary fees, the most of any carrier, the DOT says.

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