The U.S. Bureau of Transportation Statistics has released the 2010 1st Quarter earnings for airlines in the United States. While earnings from checked baggage fees are in the stratosphere, the overall look at the ancillary revenue numbers show a surprising potential overall dip from last year’s annual totals.
Back in the fourth quarter of 2008 many were shocked to find out that airlines had generated US$498,600,000 in revenue from checked baggage fees … now with airlines reporting thier first quarter 2010 (2010 Q1) revenues … airlines in the United States have collected a whopping US$769,000,000 in checked baggage fees from passengers for the quarter.
Passengers may complain bitterly about paying for checked baggage, but clearly not only are passengers paying for checked baggage, they are paying the higher checked baggage fees and are checking more baggage than before!
Overall the total ancillary revenue collected by airlines in the United States for 2010 Q1 is US$1,860,000,000 … yes US$1.86-billion.
The break down of this US$1.86-billion in ancillary revenue for airlines in the United States for 2010 Q1 is US$796-million for checked baggage, US$554-million for change of flight fees and US$534-million for other related ancillary revenues.
While US$1.86-billion sounds like a lot of money … and it is … it actually means that despite checked baggage fee revenue increasing by 33% since the same time last year, the overall ancillary revenue fees may actually fall short of 2009’s totals.
In 2009 airlines in the United States earned US$7.8-billion through ancillary revenue. If airlines follow this current earnings trend, airlines in the U.S. will “only” earn US$7.44-billion through ancillary revenue streams.
Of all the airlines in the United States, Delta Air Lines earned the most ancillary revenue across the board in 2010 Q1. Delta Air Lines’ ancillary revenue for 2010 Q1 include US$217.8-million in checked baggage fees; US$165.3-million in change of reservation fees; US$209-million in miscellaneous ancillary revenue fees for a total of US$592,100,000 in ancillary revenue for 2010 Q1.
As much as no one likes being nickeled and dimed by a company, much less by a whole industry, ancillary revenues are helping keep an industry that employs millions of people up and running…and we may complain about these fees, but the reality is that they aren’t going anywhere.