Wednesday, July 7, 2010

"Ancillary Fees" by U.S. Airlines....on track to $10 Billion in 2010

U.S. airlines collected more than $7.8 billion in ancillary fees in 2009, according to the U.S. Department of Transportation (DOT), and that number is up more than 40% over the previous year. Ancillary fees now comprise 6.5% of all airline revenue. With such compelling numbers, it is certain those pesky ancillary fees are here to stay and will go higher still as airlines concoct new ways to extract additional funds from travelers. This is on track to be $10 billion in 2010.
These fees include baggage, upgrades, seat assignments, lounge passes, purchase of pillows/blankets, boarding priority and ever more creative things are being rolled out.

These fees and the difficulty that companies are encountering in paying for such services is getting the attention of the the House Committee on Transportation and Infrastructure, Subcommittee on Aviation which will hold hearings on July 14. The focus of the hearings is the disclosure and clarity of these fees when airline tickets are purchased, as these fees have become a larger percentage of the overall cost of transportation.

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