Delta rakes in $1.7B in baggage fees

Discussion in 'Delta Air Lines | SkyMiles' started by sobore, Jun 15, 2011.  |  Print Topic

  1. sobore
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    sobore Gold Member

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    http://www.detnews.com/article/20110615/BIZ/106150326/Delta-rakes-in-$1.7B-in-baggage-fees


    Airline baggage fees are bringing in suitcases full of cash for Delta Air Lines, the dominant carrier in Metro Detroit. Airlines profits depend more on passenger fees than ever before, and Delta is flying with the highest total fees of any airline.
    The Atlanta-based carrier hauled in $952 million in baggage fees last year — more than any other carrier, according to data from the Department of Transportation. Delta also racked up the top total in reservation cancellation and change fees — a whopping $699 million. That's 64 percent and 48 percent more, respectively, for baggage and ticket change fees than American Airlines, the second-biggest collector of those charges, brought in during 2010. Delta declined to comment Tuesday.
    All together, Delta is collecting $1.7 billion in fees beyond what passengers pay for tickets.
    But those fees are the tickets to profits for the nation's airlines, which struggled through the past decade before being hit by soaring oil prices and the recession. Federal data shows that airlines collected $5.7 billion in baggage and ticket-change fees last year, and although official statistics won't be released until later this month, one industry trade group estimates North American airlines eked out a profit of just $5.1 billion in 2010.
    "Without baggage fees, the industry would have lost another $3 billion to $4 billion last year," said Bill Swelbar of the International Center for Air Transportation at the Massachusetts Institute of Technology. "We've had two years where the bag fees have been in effect. They're not going away."


    From The Detroit News: http://detnews.com/article/20110615/BIZ/106150326/Delta-rakes-in-$1.7B-in-baggage-fees#ixzz1PLEyMJ1o
     
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  2. RV03

    RV03 Gold Member

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    Glad that none of those $$s were mine!
     
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  3. USAF_Pride
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    USAF_Pride Gold Member

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    I think they can "afford" to give the military an extra bag. Numbers like these do nothing to improve the perception of any airline. The general public hates them, and if they keep bragging/posting these numbers, I would imagine in an election year, there would be talk of regulating airlines fees.
     
  4. MSPeconomist
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    MSPeconomist Gold Member

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    What again is getting lost in this discussion is that DL was the largest (USA legacy) carrier last year by a lot, so their total fee income should also be the largest in the group. Relative to size, I wonder why AA's total fees were so high.
     
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  5. rwoman
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    rwoman Gold Member

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    But that might make sense...the media likes spectacular headlines. If airfares are low (which people want), airlines are going to try and recoup $$ SOMEWHERE...
     
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  6. MSPeconomist
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    MSPeconomist Gold Member

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    Yes, and many people like the idea of not being forced to pay for services that they don't use or can avoid using if the price is too high.
     
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  7. penumpang
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    penumpang Gold Member

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  8. samonyc
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    samonyc Silver Member

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    I've never paid a bag fee to Delta, although the new 50-pound limit on international flights puts me at risk.
     
  9. MSPeconomist
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    Do I understand right that this applies to elites and SkyPriority but not BE and FC? If so, having an upgraded FC connection would allow 70 pounds per bag?
     
  10. NYBanker
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    NYBanker Gold Member

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    These bag fees are really a great subsidy for elite and other high value flyers.

    It's almost the same as a carrier saying, "we will give x% off all fares to elite travelers."

    Thanks kettles.
     
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  11. samonyc
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    samonyc Silver Member

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    I think of the waived luggage fees as volume discounts for elites, not a subsidy someone else has to cover for me.
     
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  12. MSPeconomist
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    MSPeconomist Gold Member

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    Shhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh! We don't want anyone to "fix" it.
     

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