Those niggling fees airlines charge for seemingly everything aren’t going away anytime soon. In fact, the airline fee-for-all continues to escalate at a dizzying pace, with travel consumers increasingly accepting of the nuisance fees that have become an ever-more unavoidable part of the airline-booking landscape.
According to the newly released 2016 Top 10 Airline Ancillary Revenue Rankings report from IdeaWorks, the top 10 airlines generated $2.1 billion in so-called ancillary revenue in 2007. In 2016, the fee total for the top 10 carriers had exploded, to more than $28 billion.
The data can be sliced and diced in a variety of ways, but perhaps the most telling view is of the average amount collected from each passenger in ancillary revenue, the industry term for fees over and above the basic airfare. Among the 138 airlines whose financials were examined for the report, the 10 airlines charging the highest per-passenger fees were as follows:
- Spirit – $49.89
- Allegiant – $48.93
- Frontier – $48.60
- United – $43.46
- Jet2.com – $42.46
- Qantas – $42.38
- Virgin Atlantic – $42.25
- AirAsia X – $34.41
- Korean – $32.59
- Alaska Air – $31.41
Importantly, the breakdown among different types of ancillary revenue varies considerably among airlines, reflecting different carriers’ differing business models. For United, for example, around half of the $43.46 per passenger in ancillary revenue is fees related to frequent-flyer program participation, mostly in the form of revenue United collects from the companies issuing its co-branded credit cards. By contrast, the fees collected by Spirit are overwhelmingly for bags, reserved seats, and the like. So while the per-passenger revenue may be similar, Spirit is collecting much more directly from the passenger than United.
Related:
The takeaway for consumers is straightforward. It’s no longer enough to simply consider published airfares when comparison shopping. What matters is the all-in price, including fees for checked bags and assigned seats and anything else you might require to make the flight bearable.
Fun fact: In Australia, 35 percent of credit-card spend is on Qantas co-branded credit cards.
Reader Reality Check
How do you feel about the new normal: fees for this, that, and everything?
After 20 years working in the travel industry, and almost that long writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.
This article first appeared on SmarterTravel.com, where Tim is Editor-at-Large.
Reader Reality Check: How do you feel about the new normal: fees for this, that, and everything?
/\/\/\/\/\/\/\/\/\/\
A) I hate it.
B) I try not to.
For example, DOMESTICALLY:
1) if I am flying on Southwest, I *will* pay the extra fee for “Early Bird” seating – in other words, to be part of the “A” seating group. But, on Southwest, there’s no checked baggage fees.
2) if I am flying Virgin America, where there *are* baggage fees, a) I have a VX co-branded card, so no checked baggage fee; b) because I *do* have Elevate Gold status, I actually get THREE checked bags at no charge; c) when booking, I generally buy the cheapest Main Cabin (aka Coach/Economy) seat, and get upgraded to Main Cabin Select due to my status.
3) if flying Alaska, where there are baggage fees, a) I have an AS co-branded card, so no checked baggage fees for my and up to six others on the same reservation; b) because I have MVP Gold status — due to my being an Elevate Gold on VX — I get other automatic upgrades as well.
4) if flying one of the US legacy airlines — which I generally try to avoid, if at all possible — where there are checked baggage and/or “pick-a-seat” fees, I try to avoid them either by a) getting my ticket(s) through points in a cabin where bags are included, and the specific seat isn’t a concern; b) paying for the fees with a credit card which will cover the charges; or c) bite the proverbial bullet.
On INTERNATIONAL carriers, I admit to having far less “wiggle” room due to my lack of status on carriers that fly these international routes. Basically, I follow a similar policy to flying one of the legacy carriers when flying internationally — avoid them if I can; bit the bullet if I can’t.