Airlines worldwide expected to collect $32.5 billion in fees in 2011
The worldwide airline industry is expected to collect $32.5 billion in fees for checked bags, onboard entertainment and other extras this year, a 44% increase over 2010.
The projection for a huge revenue increase came in an annual estimate released Wednesday by IdeaWorks, an airline consultant in Wisconsin, and Amadeus IT Group, a technology company in Madrid.
IdeaWorks and Amadeus said U.S. airlines should collect the vast majority of fees worldwide, pocketing $12.5 billion this year, compared with $6.7 billion last year.
The study attributes the higher revenue to increasing passenger demand and greater efforts by airlines to push for the sale of extra services and products, such as wireless Internet access and food.
The study said that about half of the extra revenues collected by the airlines would come from the sale of frequent flier miles to credit card companies. Baggage fees make up about 20% of the fees, with charges for other onboard services and products making up the balance, according to the study.
“Whatever the model, there is no doubt that the growth of ancillary sales is here to stay," said Julia Sattel, a vice president for Amadeus.
-- Hugo Martin
Photo: A passenger talks with an airline representative at Ontario International Airport. Credit: Los Angeles Times.