Airlines Rake In Over A Billion Dollars In Baggage Fees
If you've been getting that vague sensation that your extra baggage fees are keeping airlines alive, you're pretty close to the truth.
It seems that 2008, also known as the year of confusing fees, turned out to be a lucrative one for those who tacked on dollars and did the confusing. Bloomberg News explains:
American Airlines and US Airways led U.S. carriers in pocketing a collective record $1.1 billion in bag fees in 2008 as they began charging to check luggage to defray jet-fuel costs. Industrywide collections more than doubled from 2007. Last year's total was the most since the agency started keeping track in 1990... 'These small fees really add up,' said Matthew Jacob, a Majestic Research analyst in New York. 'It helps, when you're in a competitive industry and demand is under pressure, to be able to squeeze revenues out of part of your business where you couldn't previously.'
From one perspective there's nothing amiss here. The point of fees is to make money, and baggage fees make airlines money, ergo everything is copacetic. It's not exactly win-win capitalism at its finest, but also not exactly an Enron-level torches and pitchforks scandal.
Viewed from another angle, this stinks on ice. Airlines loudly insisted last year that extra fees were unfortunate but unavoidable responses to high fuel costs. Consumer advocate groups countered that the fuel crisis was just a pretext for instituting permanent—and hidden—nickle and dime fees. A couple years and a global economic meltdown later, that debate doesn't really seem like much of a debate any more.
Related Stories:
· Airlines Bag $1 Billion for Luggage [Star-Tribune]
· Baggage Fees Coverage [Jaunted]
[Photo: Joe Shlabotnik / Flickr]
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