New Law Aims to Reduce 50%+ Growth in Air Ancillary Revenue
A new bill proposed in the U.S. Senate would limit airline baggage fees, which have become a major gripe for travelers but are a leading source of profit for the industry.
Chart: United Ancillary Revenue Growth
Domestic carriers collected nearly $3.4 billion in baggage fees in 2010, according to the U.S. Department of Transportation. Those fees accounted for only about 2 percent of their total operating revenue but represented a big slice of their $7.7 billion in net earnings.
The industry reported net earnings of about $4 billion between January 2009 and June 2011, according to a Triangle Business Journal analysis of data from the federal agency; subtracting out the $7.8 billion in baggage fees collected during those 10 quarters would have left the industry with a multi-billion-dollar loss.