Monday, November 07, 2011

Lags in Bags? Airlines Bag-Check Revenue Fell in 2nd Quarter

Domestic airlines collected $886.7 million in revenue for checking bags in the second quarter of this year, down from $891.8 million in the same quarter of 2010, according to Bureau of Transportation Statistics data released today.

The slight drop-off probably can be accounted for by the overall shrinking of air travel, with most airlines having reduced flights in a strategic consolidation of efforts to fly the most profitable markets and eliminate the marginally profitable, or money-losing, ones. Another reason, I suspect, is that airlines are looking to proprietary credit-card revenues more than ever -- and free checked bags is one of the perks offered by most of those cards.

The BTS, an agency of the Transportation Department, has abandoned efforts it made in previous years to try to account for airline ancillary-fee revenue in general. Basically, the BTS now focuses on bag fees and on revenue generated by penalty charges for changing reservations.

Airlines raised $612.3 million in reservations-change fees in the second quarter of 2011, up from $593.6 million in the same quarter last year, the BTS said.

Incidentally, in the second quarter of 2008, just as airlines were beginning to charge widely for checked bags, second-quarter revenue for bag-check fees was a mere $178.2 million.


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