186% Increase in Baggage Fees from Last Year
The Bureau of Transportation Statistics reported this week that the airline industry collected $349.8 million in excess baggage fees throughout the third quarter of 2008, up from $178.2 million in the second quarter and $122.4 million in third quarter last year. This is an increase of about $186%!
American, Delta and US Airways led the pack with fees reaching $164M, $116.5M and $93.3M, respectively. I have no idea why American has such a ridiculous lead on all the other airlines, but it many have something to do with the fact that they are still the largest airline in terms of passenger traffic, and were also the first to institute a fee of $15 for a first checked bag.
Other highlights of the report (or perhaps I should refer to them as lows) include the reported operating loss margin of 5.8% for six largest network airlines, which represents the fourth consecutive quarterly loss. Delta was the only airline to report an operating profit of 125M.
It appears that even given the dropping price of oil, airlines are still spending a large share of their operating expenses on fuel. On average, they spent 6.2 cents per available seat mile on fuel this quarter compared to 1.47 cents five years ago. The lowest unit costs were reported by Southwest, Jet Blue and ExpressJet.
