Published on Tuesday, May 5, 2015

Bag fees boost airline profits by billions

The airline industry racked up a record $6.4 billion in bag and change fees during 2014 according to newly released data from the Bureau of Transportation Statistics.

Bag fee revenue was up 5.3% year-over-year to $3.5 billion last year, led by Delta Air Lines which generated $875 million followed by United with $651 million and American Airlines with $574 million.

It was also a banner year for change fees with nearly $3 billion in combined revenue, a yearly increase of 5.7%.

Extra fees for change fees, checked bags and other 'perks' such as extra legroom seating started becoming ubiquitous in 2008 and revenues have steadily risen since then.

Fee happy Spirit Airlines generates more than a third of total income from extra fees, while at Southwest Airlines, which still allows passengers to check in bags and change most tickets for free, makes just 5% in extra fees.

The American Association of Airport Executives took the opportunity to highlight the hypocrisy of the airline industry.

Airports have been lobbying Congress to increase the Passenger Facility Charge from $4.50 to $8.50 to fund infrastructure projects at the nation's airports, a move which is strongly opposed by airlines.

"For the second year in a row, the airlines have collected more in bag fee revenue than the federal government has spent on airport infrastructure across the entire nation," said AAAE president Todd Hauptli.

"It's time for Congress to turn the page on this debate and act in the long-term best interest of local communities and the nation by modernizing the Passenger Facility Charge program."

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