Carriers increasingly rely on these sneaky sources of revenue, much to travelers' dismay
Jetsetters have 5.7 billion reasons to be frustrated with extra fees that airlines charge passengers. That's the sum in dollars that U.S. airlines collected from baggage and change/cancellation fees alone in 2010. But how much is $5.7 billion in the context of a slew of airlines, millions of passengers, and all of the other revenue these companies collect each year? And what other sorts of hidden fees aren't even accounted for here?
Soaring Baggage and Change/Cancellation Fees
It's helpful to put $5.7 billion in baggage and change/cancellation fees into context. The Bureau of Transportation Statistics data has quite a few holes, so it's hard to get a good grasp on aggregate numbers for comparison. But it does provide very complete data for a couple of airlines that we can use to gauge the industry.
Below is a chart showing how baggage and change/cancellation fees as a percentage of total revenue has changed from 2007 to 2010 for Delta, Airtran, JetBlue, and United:
A much larger portion of these airlines' income is reliant upon these fees now, compared to just a couple of years ago. Delta saw the most growth. In 2007, these fees made up just 0.6% of its revenue. In 2010, that ballooned to 6.9%, 11.7 times more.
Now consider this revenue on a per-passenger basis:
There's been significant growth in per-passenger fees across these four airlines, but look at Delta. In 2007, the airline averaged only $1.55 per passenger in fees. That number skyrocketed to $16.39 in 2010.
A Drop in the Hidden Fees Bucket?
Six billion dollars in fees sounds like a lot, but that's only baggage, cancellations and flight changes. Many airlines now charge for "preferred seats." Others require a fee to "hold" an itinerary for some period of time. Check out our gallery above for more.
Some of these fees could be argued to benefit the consumer. For example, it makes sense for Spirit airlines to charge for both carry-on and checked luggage. If you've been on a full flight over the past few years, then you've seen what a disaster the boarding process has become for airlines that charge only for checked baggage. Passengers cram everything they can into large carry-ons, and the overhead space quickly fills up, creating angry fliers and delays.
It makes sense to charge fees for optional or additional expenses that not all passengers use or want to subsidize. For example, charging for a pillow makes sense, since not all passengers want or need one. That way, a pillow's cost isn't baked into the fare for all passengers.
But not all fees are so potentially well-intentioned. For example, Spirit airlines also now charges extra for the opportunity to select your seat. So you can either let them pick your seat randomly at the time of departure or pay $10 beforehand to pick from a small number of non-premium seats they have available. Of course, for even more money you can upgrade to "premium" coach seats with a little more legroom or width.
Another way to judge fees would be to consider whether the product or service they provide imposes an actual cost on the airline. Charging for food, for example, satisfies this criterion. Of course, it's likely that airlines make a profit off the food they charge for, but again, now passengers who aren't hungry or don't like airline food won't have to subsidize another passenger's peanuts.
One fee that doesn't adhere to this principle, however, is the pet fee. Since most airlines consider a pet carrier a carry-on already, there is no additional cost that the airline incurs by allowing a small dog or cat to travel in the cabin with its owner. Instead, this merely serves as a way for airlines to pad their pockets.
These days there are few things that stoke travelers' rage like hidden airline fees. So feel free to sound off in the comments below on your thoughts about whether you like a la carte options or would prefer airlines to just raise their fares in a clear, straightforward manner instead.
Image Credit: Matt Rourke/AP
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