Airlines Made Nearly $8 Billion From Fees In 2009

All those little surcharges to your airline tickets sure do add up. A recently released DOT report states that U.S. air carriers raked in $7.8 billion in fees last year, a 42% increase over 2008.

Delta, which will soon be replaced by the merged Continental/United as the world’s biggest airline, earned the most in fees in 2009 with $1.65 billion.

Meanwhile, Southwest “Bags Fly Free” Airlines placed fourth on the list of highest fee earners, placing it ahead of both United and Continental.

Spirit Airlines, who recently rankled customers and the DOT by announcing it would begin charging for carry-on bags, relies the heaviest on its fees. According to the report, 21% of the airline’s operating revenue comes from fees.

Airlines made 42 percent more from fees last year compared with first year of bag fees [Chicago Tribune]

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  1. Nogard13 says:

    Gotta love Southwest. They are #1 in the US when it comes to ticketed passengers (meaning more people fly SWA than any other airline). They are #1 for a reason!

    • womynist says:

      I flew SW once, and I wasn’t all that impressed. Yes, they do not charge for baggage which is awesome, but I wasn’t a fan of the “scramble to get the best seat you can” seating arrangements. It leaves you not knowing if you’ll get a seat next to the person(s) you’re travelling with. I’d rather have a seat assigned to me. I also don’t like that you can’t pay for drinks with cash.

      • RStormgull says:

        As long as you and your travel partner check-in at approximately the same time, you are reasonably assured you can sit next to each other. That’s what their boarding numbers are for!

      • Minze says:

        Most airlines are doing away with accepting cash for drinks, etc.

    • Blinkman987 says:

      From someone who averages a paltry 30,000-40,000 miles a year, Southwest is utter shit and I hate it. Yes, their pricing is easier for people to understand. It’s still a cattle car. Every time I see people line up at those dorky numbered flags, I hear cowbells ringing. If you only care about getting A —> B, sure; it’s fine. If you want to enjoy the experience at all, you’re S.O.L.

      • partofme says:

        You prefer the choice to have an almost guaranteed seat position. Others prefer to be able to make trade-offs in real-time. If you board with an early group, you’re going to get your pick of window/aisle… just like you would if you bought early with another carrier. If you board right at the end, you’re gonna be stuck wherever… just like you would if you didn’t buy early with another carrier (or if they just decide to move you around for absolutely no reason). But the big difference is if you board in the middle. Instead of “I’m stuck with whatever situation was determined weeks ago”, you can make trade-offs in real-time. Do I want to take the last aisle seat next to mother and young young child… or would I rather have a middle seat a few rows back next to that cutie? There is actually a choice. I kinda like that. And apparently, so does the majority of US air travelers. Different optimal methods for different value functions.

  2. outlulz says:

    What fees does Southwest charge to make it 4th? I don’t think I’ve ever encountered one and I fly them all the time.

    • Ophelia says:

      Maybe all the “federal fees” – I just looked at a sample flight that automatically added in $30 in fees on a $115 round trip flight:

      Federal Excise Tax of 7.5%
      Federal segment fee of $3.70 that will be imposed on each flight segment. Flight segment is defined as a takeoff and a landing.
      Government-imposed September 11th Security Fee of up to $5 one-way, $10 roundtrip.
      Airport assessed Passenger Facility Charges (PFCs) of up to $18.

      • r01339113 says:

        Those federal fees aren’t revenue for the airline. Perhaps it’s the volume of passengers using Southwest that leads the high volume of fees (early boarding, pets, etc.).

    • Kitamura says:

      Maybe they have so many customers that the one fee outstrips the multitude of fees being taken in by the other airlines?

  3. Scuba Steve says:

    I don’t mind fees and prices. Airlines need to make money to stay in business. That being said, I would have so much less hate for airlines if they’d just be upfront about all these fees and items when purchasing a ticket. They’re gaming the system of online booking when a $100 dollar ticket has $150 dollars worth of fees and taxes on it.

    • consumerfan says:

      Not exactly. The price of the ticket doesn’t include fees because if they included those fees, they (you) would have to pay tax on the fees as well.

      If they simply quoted the price including fees and tax up front, that would make more sense.

  4. dreamfish says:

    Airlines are poor – they need the money.

  5. 3rdUserName says:

    I know I’m in the minority here, but I cant stand Southwest.. I might just have bad luck, but the things I don’t like about them that I’ve experienced are…

    Weird seating systems, a nasty location and terminal out of Houston, very unprofessional flight crews and higher than average fares compared to flying out of IAH when booking far in advance..

    • steve6534 says:

      +1 And the typical clientele isn’t the best group to be stuck with for hours at a time. They don’t call it the walmart of airlines for no reason ! Add to that they have no hub and a mismatch of flights and I’ll happily pay more to fly a legacy carrier.

      • outlulz says:

        I’m glad they don’t have a hub because that keeps them from forcing you to do a layover through it.

    • Blinkman987 says:

      Our company’s closest hub is SNA. Granted, I enjoy traveling and I love my job. I understand and appreciate the need to fly as cheaply as possible, but it’s still a frown whenever I have to fly Southwest. I don’t understand why everybody loves it so much. So what if bags fly free? I only care about the final cost, and my bags fly free on every airline except AA anyway.

  6. PupJet says:

    Ha, that sounds about right. They also snap you with upgrades/extras as well. I learned that myself. Oh, and FYI, it wasn’t worth it to upgrade, especially since the ‘expedited security check’ wasn’t squat as I was the same as everyone else…stuck in line.

    Overall my ticket cost in the ballpark of $250 (I did an upgrade to seat selection + baggage + speedy security line check in (which REALLY wasn’t) for an extra $75) for a ticket that would have originally cost $102 w/o fees and upgrade.

  7. Sheogorath says:

    Well, guys, you gotta remember that it’s all because of the evil oil companies raising the price of gas so high…

    Oh, right. Fees never went down after the price of oil dropped. Presumably this is Obama’s fault now.

  8. antifox says:

    Rember those “extra fees” are not taxed, the airlines just keep/give to themselves as bonuses.Are the airlines getting action on the food/drinks we buy in the “secure” area? Amtak allows you to bring your own food/drinks onboard, now I budget time to get me there, all seats recline with foot rests blankets and pillows. I arrive relaxed, refreshed.

    • Dondegroovily says:

      Wait, they pay taxes on tickets but not on fees? That’s ludicrous. The gov’t is encouraging airlines to deceive us about the cost of flying.

  9. Blinkman987 says:

    Last night, I had to create a business account with Southwest. Each keystroke was more painful than the one before.

    I can’t use their expedited security line. I can’t cut in front of people with priority boarding. There are no first-class seats. There are no free upgrades to roomier economy seats. No Wi-Fi. No media players.

    It’s like a private first-world problem hell.

    • Etoiles says:

      Actually, Southwest does board their Business class flyers first. (Most flights I’m on, there haven’t been any so it goes straight to A-16. Because usually if I’m flying Southwest, I’m going to my parents’ house in Rhode Island after 10:00 p.m.)

      The rest of it you’re stuck with, though.

    • JF says:

      If you fly them enough and get A-List membership, you do get to cut in the security line. My husband has it and on the rare occasion we go somewhere together, they usually let me through on his card too.

    • outlulz says:

      You sound kind of like a privileged ass.

  10. sopmodm14 says:

    how much is contributed to “golden parachutes” ?

  11. Baelzar says:

    Solution: Greyhound or Amtrak.

    • Etoiles says:

      Yup! I can totally take Amtrak from DC to…

      …Puerto Rico
      …Hawaii
      …London
      …Australia

      And of course, I have a full extra week of vacation to burn to get to San Diego from here.

      Yes, I’m being sarcastic. Much of it is because I actually love rail travel. I wish I could take the train from DC to Boston when I visit my parents — but it’s 9 hours, and starts at about $100 — last time I bought a ticket (in advance, with an AAA discount) it was $162. jetBlue or Southwest take 45-55 minutes (so I don’t have to burn an extra vacation day) and I can get tickets for between $49 and $99, depending.

      So other than “not having the TSA” and “not being miles up in the air off of the ground,” what incentives, if any, does Amtrak give me to use their service?

      • Baelzar says:

        I’m not saying bus or trains (or tramp steamers, in your case) are better.

        I’m saying if you can’t deal with airlines charging fees either as an additional revenue stream or (in Spirit’s case) a necessary part of their business model, then TAKE THE TRAIN.

  12. Geekybiker says:

    You know the secret bonus? The less that they cover in their ticket price, the less that your frequent flier miles are worth!

  13. ThaKoolAidKid says:

    Only $8 billion?! QUICK WE NEED TO BAIL THEM OUT AGAIN!

    I’ve only been sitting on the tarmac for 9 hours, I’ll give them the benefit of the doubt and wait another 6 before I complain.

  14. HogwartsProfessor says:

    *sigh* Since they made so much off them, now they’ll never go away. It’ll just get worse.

  15. Altimerist says:

    Why dont they just charge that shit up front on the ticket price?

  16. 4dawgswoof says:

    The article fails to mention how many $Billions the airlines lost over the same period. It would put the fees into perspective.