Baggage, Reservation Change Fees Set Q1 Record
The number just keeps growing and growing and growing.
We refer, of course, to baggage fees and reservation change fees collected by the airlines, which reached a whopping high in the first quarter of 2015.
Yep, the 26 largest U.S. airlines took in a combined $1.6 billion in fees in the first quarter, up 7.4 percent from the same period last year and the highest amount for a Q1 since the Bureau of Transportation Statistics first started keeping such records on ancillary fees in 2008.
According to the BTS, 3.2 percent more passengers actually flew in the first quarter of 2015 compared to 2014, which would account for some of the checked bag and reservation change fees. But some airlines also increased those fees as well.
Although most airlines charge a standard $25 for the first checked bag, the second and third bags get exponentially higher. The same holds true with the reservation change fees -- $75 for some airlines, $100 for others, $200 for a few, and up to a $1,000 change fee on international flights.
All told, in the last 12 months domestic airlines have accumulated $6.6 billion in bag and reservation change fees.
According to the Associated Press, the ancillary fees and falling jet fuel prices contributed to a combined $3.1 billion in profits during the first quarter for domestic carriers – an eight percent profit margin.
And if you’re into data collection and numbers and extrapolation and that sort of thing, one can logically assume it’s only going to get worse (for passengers) and better (for airlines). That record $1.6 billion in fees in the first quarter? It came during what is traditionally the slowest period of the year for air travel.
Here’s our boss, TravAlliance CEO Mark Murphy, talking about the situation on CBS News Live.
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