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Travel Tip: Airlines’ Ancillary Revenue Grows in 2012

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The numbers are out, and airlines are projected to earn even more this year in ancillary revenue. Are you surprised? I’m not.

The guys that put out this survey, IdeaWorks, released the 2011 data earlier this year, which showed that all those little fees and costs earned global airlines a whopping $32.5 billion.

And now they’re forecasting that revenue will reach $36.1 billion in 2012. That’s more than 5 percent of overall airline revenue.

Some of the biggest revenue generators include baggage fees, food & beverages charges and Wi-Fi purchases. There are even charges for little conveniences like priority security screening, early boarding, exit row seat assignments, and one-time airport lounge visits.

Seems like the airlines have figured out that there are things we will—or have to—pay for, in order to make the travel experience bearable. But here’s what most people don’t know. The airlines are making even more by selling tickets at a lower price and then adding on those fees.

Airline tickets are heavily taxed by both federal and state governments. But ancillary fees? They only fall under a regular sales tax. And that translates into a big advantage for airlines, and a big disadvantage for you and me.

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