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U.S. Airlines Made $4.2 Billion In 2016 On Baggage Fees!

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U.S. Airlines Made $4.2 Billion In 2016 On Baggage Fees!

Recent figures released by the Department of Transportation indicate that U.S. Airlines collected a whopping $4.2 billion in baggage fees; this is $1 million more a day than last year or 10%. Let’s take a closer look at these figures!

Baggage Fees Increase While Other Fees Decline

Not all news is bad for travelers. U.S. Airlines may have collected more in baggage fees, but fees for changing a reservation actually went down by 4%. Therefore, U.S. Airlines “only” collected $2.9 billion.

Aside from reservation fees, passenger fares have also gone down by an additional 1%; this led to U.S. Airlines collecting $124.2 billion in passenger fees. Even though the number of passengers grew, the lower fares did mean that overall revenue declined for U.S. Airlines.

Decline in Profits

The astronomical baggage fees U.S. Airlines collected would make you believe that the profits of U.S. Airlines actually went up. This is far from the truth though, because the airline reported $13.6 billion in profits this year; this means a drastic decrease of 45% compared to last year! An explanation for the decline in profits can be found in the higher labor costs for staff, since the cost for plane fuel actually went down last year.

Customer Services Under Fire

The latest numbers came to light when U.S. Airlines was forced to attend a hearing at the Congress; this hearing was put in place after a U.S. Airlines passenger was dragged off a flight that was overbooked.

U.S. Airlines has been the subject of some controversy lately, even though the hearing only focused on subjects such as overbooking and bumping policies. Rep. Michael Capuano stated some of the sentiments most people have when trying to book a flight:

“I go in the computer to try figure out which flight I want to take. Some charge fees for baggage. Some charge fees for oxygen. Who knows? You can’t get comparable prices.”

The Defense of U.S. Airlines

United (UAL) and American Airlines (AAL) tried to justify the many fees accompanying a simple flight ticket. Representatives of the airlines stated that the fees are a way to offer passengers more options and actually keep the price down by only paying what they want to pay for. Of course, the payment system is so complicated, most passengers end up paying more.

President of United Airlines Scott Kirby said the following:

“We view charging for checked bags as the way to keep other fares low”

The statement seems a reasonable explanation at first, but then you have to take into account some of the other statements made by former airline executives; this includes William McGee – who said that the fees really disguise how much passengers pay. Even though we believe that we pay less than 25 years ago, obscured fees indicate differently.

Conclusion

Until something changes – whether it is in the internal structure of U.S. Airlines or legislation – passengers must be aware of the hidden costs that often accompany airline tickets. When you book your tickets, be on the lookout for those pesky baggage fees, but also for fees that might apply when you need to change your flight! Only by being informed fully, you might save some money on your flight.

 

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