Airlines Raked In $27 Billion From Fees in 2012

Airlines Raked In $27 Billion From Fees in 2012
Photo (cc) by InSapphoWeTrust

Airline fees totaled $27.1 billion worldwide last year, a new report says.

That’s like 27 gazillion frequent-flier miles. (By the way, have you voted for us in the American Airlines contest yet? You could win free miles yourself.) It’s a 20 percent increase from the $22.6 billion in fees carriers collectively made in 2011, the Los Angeles Times says.

It’s also a far cry from 2008, when fewer airlines were doing this sort of thing and they made only $2.45 billion in what IdeaWorks Co., which prepared the report, calls ancillary revenue. The 2011 figure covers 50 airlines, and the 2012 data are for 53 carriers.

Let’s be really clear: We’re just talking about fee revenue, from things like checked and carry-on bags and seats in the no-screaming-babies zone. The numbers might lead you to think this is a primary source of revenue, but it doesn’t include the base airfares. U.S. airfares increased by only 3 percent from 2011 to 2012, the Times says.

The IdeaWorks report found that U.S.-based airlines are raking in the biggest bucks:

  • United Airlines brought in the most fee revenue, with $5.4 billion.
  • Next is Delta, which brought in $2.6 billion from fees.
  • American’s fees amounted to $2 billion.
  • Spirit Airlines, unsurprisingly, generated more than a third of its revenue from extra fees, easily the biggest chunk of any carrier.

The report has some interesting specifics, too, when airlines made them available. Some were vague, while “other airlines provide extensive details and seem very proud of their ancillary revenue accomplishments,” the report says. For instance, Southwest made $161 million from EarlyBird boarding last year.

Spirit made $149 million just from people booking their tickets, the report says. That particular fee is called a “passenger usage fee” — I’d feel used, too — and described as a “per passenger fee charged for all bookings except those made at the airport.”

Check out the video below to learn tactics for avoiding some of the world’s most insulting fees.

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