Airlines’ Bag Fees Revenue Goes Up … Way Up

In 2009, airlines made $7.8 billion in ancillary fees, with most of the revenue coming from bag fees. This year, it looks like airlines are on track to rake in a similar amount, if the first quarter reports forecast the rest of the year. Interestingly, airlines made more than $768 million from bag fees in the first quarter of 2010, a staggering 33 percent increase (about $200 million) from the first quarter of 2009. Here are the top 10 airlines in terms of baggage fees revenue:

1. Delta: $217.8 million
2. American: $128.5 million
3. US Airways: $120.7 million
4. Continental: $76.6 million
5. United: $71.1 million
6. AirTran: $35 million
7. Alaska: $21.2 million
8. Spirit: $16 million
9. Allegiant: $14.8 million
10. Frontier: $13.9 million

Although this major increase in revenue may seem distressing, it’s worth noting that there is a silver lining. Total airline income from all ancillary fees (including bag fees, change fees, and others) actually decreased in the first quarter of 2010 compared to the first quarter of 2009, as well as compared to last year’s fourth quarter. While it might be too much to hope that airlines will stop raising fees, at least they seem to have reached an equilibrium for now.

Readers, do you think that these numbers are a good or bad sign of things to come?