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Airlines' revenue from fees has doubled since 2008, study finds

May 31, 2011 | 11:48 am

AmericanOHareThe world's largest airlines collected an estimated $21.46 billion in passenger fees and sales of frequent-flier points last year, about double the amount collected in 2008, according to a study released Tuesday.

For some airlines, so-called ancillary revenue now represents between 15% and 30% of all revenue, according to the report by IdeaWorks Co., a Wisconsin-based consultant on airline fees, and Amadeus Corp., a Madrid-based technology company for the travel industry.

The report said that 47 airlines worldwide reported revenue from extra fees, sales of frequent-flier points, and commissions for hotel room and car rentals, compared with only 23 airlines in 2007.

When fuel prices hit record-high levels in 2008, many airlines began to adopt extra fees to check luggage, order Wi-Fi services or upgrade to a seat with more legroom, among other charges.

But the airline industry continued to add such fees during the recession and now relies heavily on the revenue to offset another increase in fuel prices that began earlier this year.

"The airlines are really grabbing at this as a lifeline during very difficult times," said Jay Sorensen, president of IdeaWorks Co.

-- Hugo Martin

Photo: A passenger at an American Airlines check-in counter at O'Hare International Airport in Chicago in 2004. Credit: Tim Boyle / Getty Images

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