Airlines earn $1.2B in baggage fees over three-month period

Airlines earn $1.2B in baggage fees over three-month period
© Greg Nash

Airlines collected a record-high $1.2 billion in baggage fees from July to September of this year, according to new data from the Department of Transportation (DOT).

That represents a 10 percent increase from the same the period in 2016 and marks the sixth straight quarter that baggage fees topped the billion-dollar threshold.

Baggage fees made up about 2.7 percent of total operating revenue during the third quarter of this year, the DOT data shows.

ADVERTISEMENT
Airlines also collected another $720 million from reservation change and cancellation fees during the third quarter, bringing the total revenue for ancillary fees close to $2 billion during July, August and September.

Air carriers are not, however, required to report how much money they make from charging for “optional” services, such as carry-on bags, seat selection and priority boarding — a trend that has grown in recent years.

The latest DOT statistics come just days after the agency announced it was scrapping two Obama-era rules aimed at bringing more transparency to airline ticket prices.

One proposed rule would have forced air carriers to disclose to the DOT how much revenue they get from “optional” ancillary fees.

The other proposal would have required airlines and ticket agencies to disclose baggage fees as soon as passengers start the booking process.

While airlines are already required to disclose information about optional service fees on their websites, consumer groups say that the fees are sometimes hidden at the start of the process, which can make it more difficult for passengers to accurately compare airfare ticket prices, fees and associated rules.

But the Trump administration, which has made easing regulatory burdens for businesses a top priority, argued that the Obama-era rules would have “limited public benefit.”