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Airlines pocket $1.5 billion in luggage and reservation change fees

October 27, 2011 | 11:32 am

While the nation's airlines continue to blame higher fuel costs for cutting into profits, the industry continues to pocket hefty revenue from fees.

The country's largest airlines collected $1.5 billion in fees from checked luggage and reservation change charges in April, May and June, according to the U.S. Bureau of Transportation Statistics.

The fees collected for the second quarter represent a 1% increase from the same period last year and were up 8.5% from the previous three months, according to the bureau.

These are the only fees paid by passengers that airlines are required to disclose to the federal agency. All other fees paid by passengers are combined in larger categories with other types of revenue.

In July, the U.S. Department of Transportation proposed a new rule, requiring airlines to report 16 additional categories of fees, such as food, in-flight entertainment and seat upgrade charges. The airlines have opposed the proposed rule, saying it would impose too much of a burden on the industry.

In the last few days, several airlines have released new earnings reports that show higher fuel costs have cut into what otherwise would have been healthy profits.

United Airlines reported a drop in earnings today for the third quarter, blaming fuel costs that grew by 41% over last year.

Last week, the parent company of American Airlines reported a third-quarter loss of $162 million, or 48 cents a share, attributing it mostly to higher fuel costs and unfavorable foreign-exchange rates.


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-- Hugo Martin

Photo: Luggage stacks up at a terminal at John F. Kennedy International Airport. Credit: Reuters