Behind the fee hikes that drove stellar profits for U.S. airlines in 2012

Frequent flyers will tell you that airlines are increasing the number and cost of fees on what feels like an everyday basis.

Their frustrations were validated when IdeaWorks announced that airlines had received an estimated $36.1 billion in revenue from ancillary services in 2012. This was a whopping 11 percent increase over 2011.

Which fee changes led to the 11 percent hike?

U.S. airlines increased, bundled, or redefined a total of 52 passenger fees throughout 2012, according to travel planning site TravelNerd.

The majority, or 36 of the changes, were direct fee increases. The remaining 16 changes resulted in the bundling or unbundling of fees, increased price ranges, or redefined fee policies.

Approximately half of the fee changes related to baggage including checked bags, oversized bags, and onboard pets. The most shocking bag fee of 2012 has to be Spirit’s $100 carry-on bag fee; however, the majority of fee increases were only $5 or $10 jumps.

There were also 19 changes to service fees including ticket changes, seat selections, and priority boarding. Five changes related to in-flight services including food, unaccompanied minors, or blankets.

Fees to watch for

As we noted in an article last week, the biggest upcoming airline-fee trend for 2013 will be the bundling of five or ten services at a slight discount. Rather than introducing new services, airlines are betting that the discounts will entice passengers to make a purchase.

The specific fees changes to watch for in early 2013 are as follows:

• Airtrain will increase the fee for the first checked bag fee by $5 to $25 and the fee for a third checked bag by $25 to $75 on February 13.
• Southwest will also increase the fee for a third checked bag by $25 to $75 and boost the EarlyBird check-in fee from $10 to $12.50 on February 13.
• Allegiant increases its fee for checked bags paid for at the airport from $35 to up to $75 on April 30.