Last updated: 11:47 AM ET, Tue May 05 2015

Airlines Again Rake in Big Bucks on Bag Fees

Airlines & Airports | Rich Thomaselli | May 05, 2015

Airlines Again Rake in Big Bucks on Bag Fees

Billions, people.

We’re talking billions.

The Department of Transportation released statistics Monday that showed U.S. airlines made $3.5 billion in bag fees in 2014, a five percent increase over the previous, and $3 billion in reservation change fees, a six percent year-over-year increase.

The baggage and ticket-change fees total approximately 2.1 percent of revenue for the 27 domestic airlines charted by the DOT.

The Associated Press noted that Spirit Airlines derives 37 percent of its revenue from fees, while Southwest – the only airline that allows passengers two free checked bags and a free reservation change – makes only five percent of its revenue from fees.

Nonetheless, the increase in overall baggage and reservation-change fees drew a sharp rebuke from the American Association of Airport Executives (AAAE), which is at odds with the airlines over the proposed increase in the Passenger Facility Charge (PFC).

Airports say the fee should be raised from $4.50 to $8.50 to help fund much-needed facility improvements.

Airlines say passengers have been charged enough fees on their airfare tickets.

Airports say that’s rich, especially considering this latest news regarding baggage fees.

“For the second year in a row, the airlines have collected more in bag fee revenue than the federal government has spent on airport infrastructure across the entire nation," AAAE President Todd Hauptli said in a statement. "It's time for Congress to turn the page on this debate and act in the long-term best interest of local communities and the nation by modernizing the Passenger Facility Charge program."

Not so fast, says airline trade group Airlines for America.

"There is no crisis in airport funding and airports cannot identify a single project that has failed to move forward due to lack of funding," Airlines For American spokesman Vaughn Jennings told The Hill. "Comparing revenue from optional ancillary services to mandatory tax hikes that passengers are forced to pay every (time) they fly is misleading at best, as it completely ignores that fact that airports across our country are in a very strong financial position, already receiving billions of dollars from passengers and the government alike." 

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