Last updated: 12:33 PM ET, Fri July 29 2016

Airlines Pulled in $1.7 Billion in Baggage and Ticket Fees in Q1

Airlines & Airports | Rich Thomaselli | June 20, 2016

Airlines Pulled in $1.7 Billion in Baggage and Ticket Fees in Q1

Image courtesy of Thinkstock

The U.S. Department of Transportation (DOT) today reported that airlines earned more than $1.7 billion in baggage and reservation change fees in the first quarter of 2016.

And that did not sit well with those looking to upgrade the infrastructure of airports.

The American Association of Airport Executives (AAAE) is asking, again, why U.S. airlines have refused to back raising the local airport user fee known as the Passenger Facility Charge (PFC) that finances the construction of terminal projects, new runways and other airport improvements.

“Airline baggage fee collections are growing as high as the sun in today’s summer solstice sky, and yet the carriers continue to oppose a modest increase in the local Passenger Facility Charge that would allow airports to better accommodate the record number of passengers crowding into checkpoints and other facilities,” AAAE President and CEO Todd Hauptli said in a statement.

According to data released by the DOT’s Bureau of Transportation Statistics, airlines collected nearly $975 million in baggage fees in the first quarter of 2016. That’s up more than $100 million from the same time period last year.

The carriers also raked in more than $745 million in reservation change or cancellation fees in the first quarter. Those gains are on top of the record-level $3.8 billion in bag fees and $3 billion in reservation cancellation or change fees that the airlines collected in 2015.

READ MORE: Why Are Ancillary Airline Fees so Attractive To Travel Agents?

Airlines have repeatedly said that backing an increase in the PFC is like adding another tax or surcharge to a passenger’s ticket.

Hauptli said that’s a ludicrous thought process.

Since 2008, airlines have collected more than $25.7 billion in baggage fees and more than $20 billion extra in ticket change and cancellation fees. That total of more than $45.7 billion in baggage and ticket change fees does not include other airline ancillary charges such as pet transportation, sale of frequent flyer award miles to airline business partners and standby passenger fees.

In comparison, last year airports collectively received about $3 billion from the PFC, which is an optional charge that must be justified locally, imposed locally and used locally on FAA-approved projects that enhance local airport facilities. The federal cap on the local PFC has not been adjusted since 2000.

“It’s time for Congress to see past airline rhetoric and pass a comprehensive FAA reauthorization bill that prioritizes airport infrastructure investment,” Hauptli said.


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