Airlines Collected $3.4 Billion In Baggage Fees In 2010

One Airline Employee Told 1010 WINS The Baggage Fees Are Like "Robbery."

NEW YORK (CBSNewYork/AP) — Passengers hate them, but airlines can’t afford to give them up — those aggravating bag fees.

U.S. airlines collected $3.4 billion for checked luggage last year, according to a government report issued Monday. That’s up 24 percent from 2009 and a big reason the industry made money again after three years of losses.

In 2010, the major airlines made a combined $2.6 billion in profits, less than they collected in bag fees. The fees — typically $50 round-trip for the first piece of checked luggage and $70 for the second — allow the industry to navigate between rising fuel costs and customers who expect rock-bottom airfares.

“If it weren’t for the fees, the airlines would most likely be losing money,” said Jim Corridore, airline analyst with Standard & Poor’s.

That’s little comfort to fliers who have increasingly felt nickel-and-dimed by the airlines and now face a summer of higher airfares and packed planes.

Carol D’Auria was at John F. Kennedy Airport Tuesday speaking with some disheartened passengers, who weren’t happy about the baggage fees.

1010 WINS’ Carol D’Auria Speaks With Frustrated Passengers At JFK Airport

“There’s some airlines that don’t even allow you to have like one bag. You have to pay for every single bag that you take on there.  So it is frustrating,” one woman said.

Others said the fees were simply out of their control.

“What you going to do?  Pretty much monopoly, we can’t do anything,” another man said.

One airline employee, who did not want to go on record, even told D’Auria the fees were like “robbery.”

Delta generated the most revenue from bag fees — $952 million — followed by the combined United and Continental at nearly $655 million. American collected $580 million and US Airways $513 million, according to the Department of Transportation. None of those fees are subject to taxes.

Airlines aggressively raised ticket prices early in the year. But those increases couldn’t keep up with the price of jet fuel, now 37 percent more than last year. Some more recent attempts to raise fares have failed because passengers balked at paying more.

So instead, the airlines focus on fees.

“Unfortunately, for the airlines when they try to roll $50 into the ticket prices, people stop buying tickets,” said Rick Seaney CEO of

Earlier this month, Delta and United raised fees to check a second bag to Europe. Delta also added a fee for second bags checked to Latin America and ended its $2 discount for paying fees in advance online. Last week, several airlines did remove excess-baggage fees for the military after Delta charged a group of 14 soldiers returning from Afghanistan $200 each. A YouTube video of two of the soldiers complaining was viewed almost 200,000 times in one day.

American Airlines introduced fees for the first checked bag in 2008 as the price of oil skyrocketed. The other airlines, except JetBlue and Southwest, have since followed and progressively increased those charges. Southwest has used its refusal to charge fees as a marketing tool.

Many fliers are still unaware of the fees or don’t realize how much they have to pay until they arrive at the airport ticket counter.

“They find out very quickly when they are asked to pull out their credit card,” Seaney said.

The airlines aren’t alone in charging fees that irk customers. For instance, banks charge customers to use out-of-network ATMs and levy fees for insufficient balances. But there is something especially irritating about paying a fee just before you board a plane for your long-awaited vacation.

Buoyed by the success with bag fees, the airlines are charging for all sorts of extras.

They are now selling passengers the option to board early, get more leg room and to earn extra frequent flier miles. There are also fees for oversized bags, changing tickets, making a reservation over the phone and — on some airlines — reserving a seat in advance.

Fees for changing reservations or placing them via phone generated $2.3 billion for the airlines in 2010, down 3 percent from the year before. The Department of Transportation expects to release more figures on the other fees at a later date.

All of these fees add up to about 6 to 7 percent of overall airline revenue.

For families looking to book a vacation, the fees can add up. That $98 round-trip fare on a discount airline like Spirit isn’t such a deal when you tack on $45 each way for a carry-on plus $20 to get an assigned seat and $3 for a bottle of water.

“It makes it very difficult for comparison shopping,” said Anne Banas, executive editor of travel advice site

New rules from the Department of Transportation will require airlines, starting Aug. 23, to “prominently disclose all potential fees” on their websites prior to a ticket purchase. In the meantime, fliers just need to do their research before heading to the airport.

Henry Harteveldt, an airline analyst with Forrester Research, said airlines have done a poor job of explaining the fees to customers. Still, despite the bad publicity, if given the chance to do it all over again, Harteveldt said the airlines certainly would.

He expects more charges in the future. A checked-bag fee based on distance flown is one possibility. Or fees could be cheaper if a ticket is purchased months in advance but much more expensive if paid on the day of travel.

(TM and Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

More from Carol D'Auria

One Comment

  1. Henry Tenby says:

    It isn’t just baggage that is expensive. Many low cost airlines are not providing their passengers with the lowest fares possible because of another cost element .. as explained in this interesting video:

  2. Michael H. says:

    Baggage fees and the TSA’s GateRape are the main reasons why I drive from NY to Atlanta every year for my vacation. I’d rather spend 16 hours in the car (and my wife doesn’t drive, so it’s all me) than deal with the extra hassle and expenses imposed by the airlines and the TSA.

  3. doc in NJ says:

    travel by plane used to be a pleasant adventure – the thrill of arriving at the airport, waiting at the gate, boarding and finally taking off. Now, it is a mind-numbing venture full of trepidation, endless ticket & ID checks, searches, seizures, and finally boarding only to be left trembling from the thought that if you look at someone the wrong way, your trip will end with an escort off the plane. My, how times have changed.

  4. john smith says:

    i remember as recently as 4 years ago where you could check up to 2 bags for free on any airline.i would rather it that way than paying at the ticket counter to check my bags underneath the plane.

  5. Rex John says:

    It is unconscionable that airlines do not pay taxes on the revenues they collect from add-on fees. They argue that if they do, ticket prices will increase — but that is true of every business in America: ultimately, expenses are passed on to consumers. Why should airlines be any different? It is also shameful that the airlines are asking for a delay in new regulations requiring them to disclose these fees in advertised ticket prices. Why shouldn’t they? If they think it is acceptable to charge these outrageous fees, why would they be ashamed to say so up front? The airlines are profitable, no matter what they say — maybe not as profitable as they would like, but what business is? It is time to acknowledge that their monopolistic and borderline anti-trust business practices have made it necessary for new and strong regulation. Americans should contact their elected officials and demand as much.

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