That's How They Getcha: Airlines Extract $6 Billion in Fees From Americans


What's the true price of flying? It's much more than the price of a ticket. And it has been for a long time.

Last year, Americans likely spent more than $6 billion in baggage, cancellation, and change fees, on top of their ticket price, in 2012. The Bureau of Transportation only has data through the first nine months of last year, but total fees are up about 4 percent over previous years.

Here's a look at total fees by airline:

Screen Shot 2013-01-09 at 10.27.07 PM.png

And here's the baggage fee data as a pie chart, if you prefer that sort of thing. Delta, United, and American account for about 60 percent of total baggage fees.

Screen Shot 2013-01-09 at 11.07.08 PM.png

And finally, here are those fees graphed against each airline's market share in domestic and international passenger miles, also according to the Bureau of Transportation. This is really the key look.

Screen Shot 2013-01-10 at 10.14.01 AM.pngWhat conclusions can we draw from these graphs, in particular the last one?

(1) Delta and US Airways are the worst. Maybe you knew that already.

(2) But don't be too hard on them. Generally speaking, the airlines that fly the furthest have the most fees, since people are much more likely to check bags and pay more per ticket for international flights.

(3) Airlines with mostly domestic routes have the fewest fees, for the same reason.

Fees annoy customers for the perfectly sensible reason that they seem like surprising tricks, since the true cost of flying isn't shown on their ticket. But the "true cost of flying," if such a thing were measurable, could scarcely be represented on a uniform ticket because it costs varying amounts to fly various passengers on the same plane.

Imagine if there were no baggage fees and everybody's ticket were the same price. A child that weighs 40 pounds without bags would be considerably quicker to load, cheaper to accommodate, and easier to transport than a larger fellow with three checked bags that require sorting, tagging, and carrying, plus two carry-ons that add to the boarding time. As you can see, a little price discrimination through fees is sensible and defensible.

But why stop at sensible? Airlines are the economy's most notorious wizards of price discrimination. Ticket prices do roller-coaster loop-de-loops in the weeks before the flight to tease discriminating buyers. Then prices rise dramatically at the end to take advantage of desperate flyers, who are often business travelers who are less price sensitive since they can pass along the cost of their ticket to the company.

The industry's reliance on absurd fees makes it a target of loud customer service complaints -- like, carry-on fees, really? -- but the bottom line for casual passengers isn't as bad as it seems. A mix of competition and price management have pushed down airfares by half since 1978, according to Eduardo Porter's book The Price of Everything. The more airlines can rely on fees and hold down the price of a simple ticket, the better things get for savvy carry-on-only customers.

Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

A Wild Vacation in the Pacific Northwest

A not-so-ordinary road trip, featuring extra-tall art bikes, skateboards, and hand-painted vans

Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus


Adventures in Legal Weed

Colorado is now well into its first year as the first state to legalize recreational marijuana. How's it going? James Hamblin visits Aspen.


What Makes a Story Great?

The storytellers behind House of CardsandThis American Life reflect on the creative process.


Tracing Sriracha's Origin to Thailand

Ever wonder how the wildly popular hot sauce got its name? It all started in Si Racha.


Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.


Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.


The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air



More in Business

Just In