Airlines Making Billions From Baggage Fees

A huge pile of cash.

Photo credit: Shutterstock

Airlines are making a killing from fees. Last year, U.S. based airlines brought in a total of $4.2 billion from baggage fees alone, according to figures released by the Department of Transportation. That’s a 10% increase from 2015.

Yet according to airline executives, profits aren’t as high as they were in the past, even with lower fuel costs. Airlines reported $13.6 billion in profits total, down 45% from 2015, citing higher labor costs as the reason for the lower figures. Lower passenger fares also attributed to the lower revenue, as ticket sales fell one percent to $124.2 billion.

These lower profits are the main justification for extra fees, not just for luggage but legroom, seat selections, and early boarding to name a few. Airline executives claim these fees allow passengers to choose the kinds of service they want, even though few flyers are fans.

This news comes right as executives from America’s major airlines testified before Congress about their customer service protocols. While this was prompted by last month’s United Airlines debacle, many took the opportunity to vocalize their disdain for airline fees.

William McGee, a former airline executive now representing the Consumers Union, argues that the fees are disingenuous and unfair to passengers.

“We’ve heard a lot about pricing today, about fares being lower than they were 25 years ago,” McGee testified. “The fact is that obscures fees we didn’t used to pay. Every day there are higher and higher fees. Passengers are getting gouged.”

Massachusetts Rep. Michael Capuano agrees that customers are negatively affected by these business practices.

“I go in the computer to try to 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,” Capuano said.

As expected, executives from United and American disagreed, saying the baggage fees help keep other costs, such a ticket prices, low.

Six Domestic Airlines Now Flying to Cuba

Beach in Cuba

Several big name airlines will now be offering commercial flights to Cuba.
Image: Flickr CC/Scaturchio

The Department of Transportation has given approval for American Airlines, Frontier Airlines, JetBlue Airways, Silver Airways, Southwest Airlines, and Sun Country Airlines to fly from the U.S. to Cuba, with flights slated to begin as early as this fall. Flights will be departing from Miami, Fort Lauderdale, Chicago, Minneapolis-St. Paul, and Philadelphia.

“Last year, President Obama announced that it was time to begin a new journey with the Cuban people,” said Transportation Secretary Anthony Foxx. “Today, we are delivering on his promise by re-launching scheduled air service to Cuba after more than half a century.”

Right now, nine Cuban cities are on the approved list for travel: Camaguey, Cayo Coco, Cayo Largo, Cienfuegos, Holguín, Manzanillo, Matanzas, Santa Clara, and Santiago de Cuba. Due to the set number of flights allowed, applications to fly to Havana are currently being processed. The Department of Transportation says they should have everything settled with Havana travel by the end of the summer, so travelers can visit Cuba’s capital once flights begin.

While American Airlines has been offering charter flights to Cuba the past 25 years, this will be the first time it will be offering open commercial flights. It is currently awaiting approval on flights from major cities like Dallas, Chicago, and Los Angeles to Havana. JetBlue will also be opening up bookings for travel this summer once all approvals are met.

The timing couldn’t be any better. Recently the Travel Leaders Group released data from their nationwide survey, showing an increased interest by Americans in visiting Cuba. Two years ago 11 percent of respondents said they would go as soon as the U.S. made it safe for them to do so. This year, 16 percent said they can’t wait to pack their bags.

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