Don’t look now, but the airline industry is getting rich off fees. Very rich.
The industry collected $2.5 billion in luggage fees for the first three quarters of the year, according to data released by the government yesterday. The damage from ticket change fees? $1.7 billion.
Delta Air Lines wins in both ticket change fees ($530 million) and luggage fees ($733 million). American Airlines came in second place ($353 million/$431 million) and United Airlines took third place for change fees ($243 million) while US Airways showed in the baggage category with $388 million collected in the first three quarters of the year.
Needless to say, passengers are furious about these fees.
“Airlines continue to insult my intelligence,” says reader Scott Higbee. “The baggage fee is a money-grab, pure and simple.”
If this had been a legitimate “unbundling” action, then airlines would have lowered their fares when they added baggage and change fees, he says. But ticket prices didn’t go down. In fact, they’ve been increasing and are expected to rise even more in 2011.
(Ironically, the airline industry is still complaining about its profits, which it calls “pathetic.”)
There’s more to this story, and in order to tell it, I have to rewind to an earlier column about good airline fees and bad airline fees.
Good fees, as I explain, add a service that the airline didn’t have before, like onboard Wi-Fi; bad fees take something away that used to come with the ticket, like the ability to check a bag or make a confirmed seat reservation, without lowering ticket prices in a meaningful way.