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It’s Official- Those Airline Fees are Huge Revenue Drivers

Consumers hate airline fees but much like bank fees, they pay now and complain later. The latest data from the U.S. Department of Transportation’s Bureau of Transportation Statistics found that U.S. airlines brought in about $3.5 billion in checked-luggage fees and an additional $2.6 billion in fees associated with changing a reservation.

Who reigns king in the fee revenue war? That would be Delta Airlines. The company produced $865.9 million in bag fees and an additional $778.4 million in change fees.

USAToday reported that, “For U.S. domestic flights, on all but the most expensive fares, the ticket price in many cases is a break-even proposition for an airline,” says Henry Harteveldt, a travel industry analyst. “Fees are critical to how airlines earn profits.”

Airline Fees Will Probably Get Worse

Just when you thought you had figured out how to stuff a carry-on bag with enough clothes to live out of it for a few days, the rules are starting to change. Frontier airlines recently announced that it will begin charging between $25 and $100 to carry anything other than a purse or small item onto an aircraft.

The good news is that the rule has an exception. If you book your ticket directly through the Frontier website as opposed to a third-party site like Expedia, your carry-on is free. (Customer-ingenius, clever or both? You decide.)

Last month, US Airways and United raised their ticket change fees $50. Now, if you want to change your reservation, it will cost $200.

Southwest, changed it’s no-show policy. In the past, if you missed your flight, the airline would rebook you free of charge. Now, if you don’t call ahead to alert the airline that you’ll be late, you’re going to be charged. Still, though, on Southwest, “bags fly free!”

Trade It

Or don’t. Airlines have the not-so-impressive distinction of barely making a profit with each passing year. Although the stocks have seen impressive gains, the better metrics are largely due to reduced capacity. There are much better areas of the market that would be better keepers of your money.

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