Ancillary Revenue Fees For U.S. Airlines Net US$7.8 Billion Last Year!

Back in May 2009 I wrote about how airlines were using ancillary revenue, primarily from checked baggage fees, as their financial salvation. At the time many travelers were astonished to find out that in the fourth-quarter of 2008 airlines in the United States had netted US$498,600,000.

For those of you that thought US$498,600,000 in a single financial quarter was impressive, or shocking depending on how you look at it, the Department of Transportation’s Bureau of Transportation Statistics has released the financial statics for ancillary revenue for U.S. airlines in 2009. The total amount earned by airlines through these fees comes to … are you sitting down …

…  a grand total of US$7,800,000,000 (if you lost track of the zeros, that’s US$7.8 billion).  This figure is up 42% from 2008, however to be fair, most airlines in the U.S. did not begin charging for checked baggage until the second fiscal quarter of 2008.

Delta Air Lines, currently the world’s largest airline, netted the most significant amount of revenue from these fees, pulling in US$1.68 billion.

The primary revenue driver for airline ancillary revenue has not changed since 2008, when the majority of airiness began unbundling airfares to charge for items and services previously considered part of an airfare, the most significant amount of ancillary revenue is derived from checked baggage fees.

With such earning potential available through ancillary revenues, and airlines such as Ryanair charging passengers to check-in and Spirit Airlines charging for carry-on baggage, it is unlikely we’ll see a trend or airlines moving away from ancillary revenues.   Southwest Airlines, the only major airline in the United States that does not charge for checked baggage, ranked fourth for ancillary revenue fees, ahead of larger airlines with baggage fees such as United Airlines.

Remember to pack in a carry-on bag only and purchase your snacks before you fly!

Happy Flying!

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