Where passengers pay the most fees.
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Airline fees have come to plague many travelers in recent years. Simple perks that passengers had long been accustomed to, like receiving a free blanket and pillow or checking a single piece of luggage, are now luxuries that airlines charge for in order to boost profits. Unfortunately, every major airline is guilty of charging at least some fees, but as government data show, some airlines are significantly worse than others.
The Bureau of Transportation Statistics ranked the 10 domestic airlines that earned the highest revenue from extra fees in the third quarter of 2009, and used this data to find how much passengers on each of these airlines paid on average for extra charges. The charges included in these statistics are baggage fees and reservation change fees, as well as pet transportation costs, charges associated with redeeming frequent flier miles and standby passenger fees.
The silver lining to this story, if there is one, is that most customers seem to be able to avoid the majority of extra airline fees by planning ahead. Otherwise, the average fees paid per passenger would certainly be much higher than they are here.
For Delta (NYSE: DAL - News), fees are big business. This airline grossed nearly half a billion dollars from extra fees in the third quarter of 2009, almost twice that of American Airlines (NYSE: AMR - News), and that amount has only continued to skyrocket to almost $700 billion in the third quarter of 2010. Of course, Delta is also the second largest airline in the world and has more passengers than most, which allows it to earn more in fees than its competitors. But even with that in mind, fees account for roughly a tenth of the airline's operating revenue.
Passengers flying Delta pay an average of $24 in extra fees, or more than twice what passengers on United and Continental paid and quadruple the amount of those flying Southwest. Needless to say, Delta charges for everything, and charges a lot. The first checked bag currently costs $25 and the second costs $35, and the airline periodically increases this rate. Changing your ticket costs an astounding $150 and changing a flight that was booked with frequent flier miles will also cost you $150. More recently, the airline announced plans to charge as much as $160 extra for special seats in economy class on long distance flights that have the incredible ability to recline 50% farther back.
Next time you book a flight with Delta, or any of the other airlines on the top portion of this list, be sure to closely review their fee policies to ensure that you don't get smacked with excess charges before you take off.
Extra fees collected per passenger: $24
2. Northwest Airlines
Northwest Airlines, like many of the carriers on our list, charged for the first piece of luggage ($15) and as much as $100 for redeeming frequent flier miles. In a strange way, this fee-happy policy makes it all the more fitting that Northwest Airlines merged with Delta, the most fee-happy airline on our list.
Extra fees collected per passenger: $20
3. US Airways
US Airways (NYSE: LCC - News) earned about $230 million in the third quarter of 2009 from extra fees, falling just behind American Airlines. But these fees have proved vital to US Airways' overall profits, accounting for approximately 8% of the airline's operating revenue in each of the previous five financial quarters. Passengers on this airline generally pay about twice as much as they do when flying almost any other airline, and it's not hard to see why.
Depending on where you're flying to, the airline may charge as much as $25 for the first piece of luggage, $55 for the second and $100 for the third. If that's not enough, the airline announced this week that it will now charge $90 extra for checked baggage that is overweight by 50-70 pounds, nearly twice the previous amount, and a whopping $175 extra for bags overweight by more than 70 pounds, compared to a $100 fee before. On top of all this, US Airways may charge anywhere from $25 to $75 to redeem frequent flier miles and $150 to make changes to your flight.
Extra fees collected per passenger: $18
4. American Airlines
American Airlines (NYSE: AMR - News) proved to be one of the worst fee offenders in 2009, and chances are, it's only worse now, thanks to some ridiculous new fees, including paying as much as $39 more to sit in one of the first few rows ... in coach.
This is all the more infuriating given how much money the airline already makes from ancillary fees. In total, American Airlines earned $261 million from extra fees in the third quarter of 2009, the second most of any domestic airline, according to BTS data. Moreover, that amount increased to just shy of $300 million one year later.
Extra fees collected per passenger: $12
5. Alaska Airlines
Alaska Airlines (NYSE: ALK - News) has no shortage of extra fees. This airline charges $15 for the first piece of checked luggage and $25 for the second, as well as a $100 reservation change fee, a $15 fee for booking a reservation at the ticket counter and a $100 fee for bringing a pet on board (each way).
Extra fees collected per passenger: $11
6. Continental Airlines
Continental made headlines last year when it officially merged with Untied Airlines to become the world's largest airline. Unfortunately, this business deal is unlikely to help consumers, as passengers ended up paying the same amount in extra fees on both these airlines.
Extra fees collected per passenger: $11
7. United Airlines
United (NYSE: UAL - News) is notorious for poor customer service and luggage mishaps, but that doesn't stop the airline from charging a number of extra fees. Passengers pay $25 for their first checked bag and $35 for the second checked bag, not to mention the airline charges as much as $30 to redeem frequent flier miles.
Extra fees collected per passenger: $11
AirTran (NYSE: AAI - News) is known for having some of the cheapest flights in the country, but the cost of those flights has been offset slightly by extra fees, including charging for both the first and second piece of checked luggage and ticket change fees. In fact, according to data from the Bureau of Transportation Statistics, extra fees accounted for more than a tenth of AirTran's overall operating revenue in the third quarter of 2009, an indication of how much the company has leaned on these fees to make a profit. However, in September 2010, Southwest bought Airtran, which could mean reduced fees down the road if Southwest chooses to apply its fee philosophy to its new acquisition.
Extra fees collected per passenger: $10
JetBlue (Nasdaq: JBLU - News) generally charges fewer fees than most major airlines, but is not quite as generous as Southwest. This airline doesn't charge for the first checked bag, but will charge anywhere from $50-$100 for the second. JetBlue also charges a reservation change fee ($100) and has even imposed new fees like getting extra legroom for $10.
Extra fees collected per passenger: $8
10. Southwest Airlines
Southwest (NYSE: LUV - News) has built its reputation in recent years by emphasizing the fact that it doesn't charge consumers fees for checking their first two pieces of luggage or changing their reservation, as most airlines now do. The company also refuses to add silly fees like charging for legroom or snacks to increase profits. This is clearly reflected in the comparatively small amount that the average passenger pays in extra fees when flying Southwest. That said, the company does charge for some things, including an optional $10 early bird check-in fee and sometimes for an extra seat if the passenger is deemed overweight.
Extra fees collected per passenger: $6
- American Airlines