US airlines collected $769 million in baggage fees in Q1

Jun 30, 2010

Low-cost and regional airline groups reported operating profits in the first quarter of 2010 while the network airline group posted a second consecutive quarterly loss, according to data released by the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS).

Published: 30 Jun 2010

Low-cost and regional airline groups reported operating profits in the first quarter of 2010 while the network airline group posted a second consecutive quarterly loss, according to data released by the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS).

US airlines collected $769 million in baggage fees in Q1

Low-cost and regional airline groups reported operating profits in the first quarter of 2010 while the network airline group posted a second consecutive quarterly loss, according to data released by the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS).

From January to March, the airlines collected $769 million in baggage fees and $554 million from reservation change fees.

Airlines also reported revenue of $534 million from other ancillary revenue, from passengers and from other sources. This revenue category includes revenue from frequent flyer award programme mileage sales and pet transportation fees.

Total first quarter 2010 airline revenue from all ancillary sources was $1,857 million, with Delta reporting the most, $592 million.

The combined passenger fees and ancillary revenue from other sources constituted 6.2 percent of the total revenue of the 28 carriers that reported receiving ancillary revenue.

Spirit Airlines’ reported the largest percent of operating revenue from ancillary revenue of any carrier, 21.7 percent.

Operating margin

The six network carriers posted a loss margin of 0.7 percent in the first quarter with a combined operating loss of $163 million (Table 2). In the first quarter of 2009, these carriers reported a loss margin of 4.0 percent with a loss of $867 million.

The seven low-cost carriers reported a 2.4 percent profit margin with profits of $115 million. The six reporting regional carriers posted a 3.9 percent profit margin of $60 million.

The top three operating profit margins were reported by low-cost carriers Allegiant Air and Spirit and regional carrier Comair. Low-cost carrier Virgin America reported the largest loss margin. The only other operating losses were reported by network carriers American Airlines, US Airways and Continental Airlines, low-cost carrier Frontier Airlines and regional carrier ExpressJet Airlines.

Baggage Fee Collections
Ranked by 1st Quarter 2010 Baggage Fee Revenue
Dollars in Millions (000,000)

1Q 2010 Rank Airline 1st Qaurter 2009 2nd Qaurter 2009 3rd Qaurter 2009 4th Qaurter 2009 1st Qaurter 2010 Percent Change 1Q 2009 - 1Q 2010 (%)
1. Delta* 102.8 118.4 129.5 131.1 217.8 111.9
2. American 108.1 118.4 119.5 129.2 128.5 18.9
3. US Airways 94.2 104.1 111.4 122.5 120.7 28.1
4. Continental 55.6 63.2 66.0 69.7 76.6 37.8
5. United 59.1 67.4 77.9 64.6 71.1 20.3
6. AirTran 30.9 40.5 40.2 34.3 35.0 13.3
7. Alaska 5.4 6.2 25.2 21.8 21.2 292.6
8. Spirit N/A 16.2 16.4 14.3 16.0 N/A
9. Allegiant 11.6 12.0 10.3 10.2 14.8 27.6
10. Frontier 12.5 13.5 14.9 14.4 13.9 11.2
Industry Total** 577.9 669.6 739.8 736.1 768.5 33.0

Source: Bureau of Transportation Statistics

** 20 carriers reported baggage fee revenue in 1Q 2010