Revenue from Bag Fees Keeps Rising

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The Bureau of Transportation Statistics released bag and change fee data for the third quarter of this year, and let me tell you, the airlines are raking in some serious fee cash.

First up: bag fees. For the quarter, airlines took in a collective $906 million, up from last quarter’s $891 million. For the year, the industry has amassed $2.56 billion in bag fees.

Last year, the industry took home $739 million in bag fees during the third quarter. That’s an increase of nearly $170 million year-over-year, or 23 percent.

So who brought home the most bag fee bacon? Delta, not surprisingly, led the way with $259 million last quarter, followed by American, US Airways, Continental, and United, in that order. Interestingly, the combined bag fee revenues of United and Continental, which are listed separately even though they completed their merger in October, do not exceed Delta’s figure.

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The rest of the list is rounded out by smaller airlines and low-cost carriers. AirTran is sixth with $38 million, JetBlue is 10th with $15 million, and Southwest, due to excess, overweight, and oversize bags, is 14th with $7.7 million.

Change fees are a different story. Revenue here actually fell from last quarter, and may have leveled off. The industry took in $590 million in the third quarter, compared to $593 million in the second quarter (which was up significantly over the first quarter). The industry actually had two better quarters last year, each of which topped $600 million.

Leading the way, again, was Delta, with $183 million, followed by American, United, US Airways, and Continental. JetBlue was sixth.

There’s little to add here that isn’t apparent from just looking at the numbers, but I’ll say it anyway: Between hundreds of millions in revenue and US Airways’ president recently saying his airline’s profit comes entirely from ancillary charges, fees have definitely become a permanent fixture in the airline industry. The only question is when, not if, bag fees alone will become a $1-billion-per-quarter business.

To keep track of all these fees, check out our Ultimate Guide to Airline Fees.