Last updated: 04:39 PM ET, Fri September 30 2016

Baggage Fees Rise Again – And So Does Pressure On Airlines

Airlines & Airports | Rich Thomaselli | September 20, 2016

Baggage Fees Rise Again – And So Does Pressure On Airlines

PHOTO: Airline baggage fees are a bone of contention for the American Association of Airport Executives. (Courtesy Thinkstock)

As airline baggage and reservation change fees continue to rise, the American Association of Airport Executives (AAAE) has renewed its pressure on airlines for opposing an increase in the Passenger Facility Charge (PFC).

The PFC cap has been $4.50 since 2000. AAAE and several other organizations are asking for what they call a modest increase to passenger airline tickets – from $4.50 to $8.50, with future increases based on inflation.

An increase in the PFC is something the airlines oppose.

Yet the AAAE mocked U.S.-based carriers after the Department of Transportation released airline income statistics for the second quarter of 2016 -- $4.6 billion, up from $3.1 billion in the first quarter of 2016 but down from $5.5 billion in the second quarter of 2015.

Included in that is a total is a record $1.1 billion in baggage fees and $755 million from reservation change fees for the second quarter.

Add in first quarter numbers, and airlines have made $3.5 billion in baggage and reservation fees in the first six months of 2016.

The AAAE once again questioned the continued opposition of U.S. airlines to updating the PFC, which helps finance the construction of terminal projects, new runways and other airport improvements.

“The autumn leaves may be starting to fall, but the astounding bag fee collections from the airline industry continue to defy gravity,” AAAE President and CEO Todd Hauptli said in an esoteric statement. “What defies not only gravity, but also logic, is their increasing addiction to bag fees and ancillary revenues (the primary purpose of which seems to be to support their ever-soaring profits) while continuing to vigorously oppose a modest increase in the airport Passenger Facility Charge program.

Hauptli said he will continue the fight with the Senate and the House, which declined to address the PFC last month in its Federal Aviation Re-Authorization bill.

“AAAE renews its call on Congress to see past the self-serving airline rhetoric and act in the public interest by modernizing the PFC as soon as possible,” Hauptli said.

According to the DOT, airlines have collected more than $26.8 billion in baggage fees and more than $21.5 billion in ticket change and cancellation fees since 2008. That total of nearly $50 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, none of which are tracked by the DOT.

Hauptli said that, by comparison, 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. 


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