United Airlines Raked in US$5.2 Billion in Airline Fees Alone Last Year
By Charlie Wells, New York Daily News | Jul. 27, 2012
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United Airlines made nearly US$5.2 billion from fees last year, topping a global list released in a study this week.
United's "ancillary fees" -- which cover penalties for items such as baggage, food, and boarding time -- brought in more than double the US$2.5 billion that Delta, next on the list, collected, according to a study put out by airline consultancy IdeaWorksCompany.com and sponsored by travel technology company Amadeus.
In total, US$22.6 billion was collected by the 50 airlines analyzed in the study. That's an increase of more than a billion dollars from last year.
And, it's much more than the US$2.45 billion reported by IdeaWorksCompany.com in 2007.
After United and Delta, the next carriers on the list are: American, Qantas, Southwest, easyJet, Ryanair, US Airways, Brazil's TAM Airlines and Alaska Air Group.
Of course, extra fees bring in extra revenue for airlines. But they also provide carriers a benefit few consumers are aware of: tax benefits.
According to CBS News travel editor Peter Greenberg, airlines tickets are subject to federal taxes, but "fees" are not.
"The airlines save -- actually they make -- an incredible amount of money by pricing things this way," he said.
Greenberg also said airlines charge fees simply because people are willing to pay them.
"It's clear that airlines recognize the importance of ancillary revenue and are developing increasingly innovative ways to generate this," Jay Sorensen, president of IdeaWorksCompany.com, said in the report.