Airlines are making billions in ancillary fees and that’s just in three month, according to a new report from the Department of Transportation (DOT).
Second-quarter revenue numbers indicate that airlines collected $1.5 billion in ancillary fees, not related to travel tickets, and the number keeps on rising. Fees began creeping up in 2008 and since then, airlines have made astronomical revenue from charging people for baggage, change-of-ticket, and cancellation fees.
The fees that are reported, baggage and change-of-ticket/cancellation fees, brought in $886 million and $612 million, respectively. In addition to the reported fees, airlines also reported $709 million in “other fees,” which are not spelled out for the public.
That might all change. A new rule was proposed in July that would force airlines to expand the “others” category and reveal 18 more categories, including in-flight entertainment, pets, food, and one-time lounge fees. The combined fee, including baggage, change-of-ticket, and “other” fees made up 5.5 percent of the total revenue from the 28 carriers that sent in their reports, with Sprint Airlines having the highest ancillary fees at 29.7 percent of its total revenue.
Airlines are required to prominently display fees on their websites, but not all of them are even doing that.
According to DOT spokesperson Bill Mosely, the largest U.S. carriers are following with the rule, but there are several foreign carriers that might not be complying.
It’s also difficult to find that information sometimes and many customers are being hit with surprising fees out of confusion.
If the proposed rules go into effect, airlines would have to report how much revenue they’re collecting in the following categories:
1. Booking fees, including fees for telephone reservations
2. Priority check-in and security screening
3. Baggage*
4. In-flight medical equipment
5. In-flight entertainment/internet access
6. Sleep sets
7. In-flight food/non-alcoholic drinks
8. Alcoholic drinks
9. Pets
10. Seating assignments
11. Reservation cancellation and change fees*
12. Charges for lost tickets
13. Unaccompanied minor/passenger assistance fee
14. Frequent flyer points/points acceleration
15. Commissions on travel packages–hotel/car rental/etc.
16. Travel insurance
17. Duty-free and retail sales
18. One-time access to lounges
19. Other
What do you think about the amount of money the airlines are making from ancillary fees? Sound off in our comments section below.
Related links: Bureau of Transportation Statistics, Department of Transportation, DOT Proposed Rules
By Alyssa Caverley for PeterGreenberg.com
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