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Airlines Collected Almost $900 Million in Baggage Fees and $600 Million in Reservation Change Fees in Third Quarter 2011

Tuesday, March 13, 2012 - 01:39 PM

Some interesting nuggets in the Bureau of Transportation Statistics third quarter 2011 airline report:  those pesky baggage fees and reservation fees?  They contributed a total of $1.5 billion to airline revenue between July and September of 2011, alone.

Airlines collected another $872 million from frequent flyer award sales and pet transportation fees.   The press release notes:

"Other fees, such as revenue from seating assignments and on-board sales of food, beverages, pillows, blankets, and entertainment are reported in a different category with other items and cannot be identified separately."

Here's the full release:

Scheduled passenger airlines reported a profit margin of 6.8 percent in the third quarter of 2011, down from the 10.4 percent profit margin in the third quarter of 2010, BTS reported today in a release of preliminary data. 

BTS, a part of the Research and Innovative Technology Administration, reported that the network airlines reported an operating profit margin of 7.1 percent as a group in the July-to-September 2011 period. The low-cost group's profit margin was 6.0 percent, and the regional group’s was 2.5 percent. See Airline Financial Data Press Releases for historic data.

As part of their third-quarter revenue, the airlines collected $898 million in baggage fees and $603 million from reservation change fees from July to September 2011.

In addition to baggage and reservation change fees, airlines reported ancillary revenue of $872 million from passengers and from other sources. This revenue category includes revenue from frequent flyer award program mileage sales and pet transportation fees. Total third quarter 2011 airline revenue from all ancillary sources that can be identified, including fees and frequent flyer sales was $2.381 billion, with Delta Air Lines reporting the most, $814 million.  

Baggage fees and reservation change fees are the only ancillary fees paid by passengers that are reported to BTS as separate items. Other fees, such as revenue from seating assignments and on-board sales of food, beverages, pillows, blankets, and entertainment are reported in a different category with other items and cannot be identified separately.

The baggage and reservation change fees from passengers combined with ancillary revenue from other sources constituted 5.8 percent of the total revenue of the 27 carriers that reported receiving ancillary revenue. Spirit Airlines reported the largest percent of operating revenue from ancillary revenue of any carrier, 31.1 percent. For additional Miscellaneous Operating Revenue data, go to BTS Schedule P-1.2.           

            See BTS Airline Financials Release for summary tables and additional data.

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