Airline profits up 64%, bag fees generate $900 million in 2nd quarter
The airline industry strategy of packing cabins to record levels, charging fees for bags, food and entertainment and merging to reduce competition continues to pay off.
The nation’s airlines posted $3.6 billion in profits in the April-through-June period, a 64% increase compared with the $2.2 billion in profits earned in the same period last year, according to new federal data.
About a quarter of the $44.6 billion in revenues in the second quarter came from bag and other passenger fees, according to the Bureau of Transportation Statistics.
The airlines collected $900 million in bag fees and $753 million in reservation change fees, according to the federal agency, which does not collect data on other passenger fees, such as charges for the sale of food and entertainment.
While revenues from fares and passenger fees rose by nearly 8% in the second quarter, compared with the same period last year, fuel costs remained flat, with labor costs rising about 8%, federal statistics show.
Airline industry experts attribute the strong financial numbers to carriers filling almost every available seat and collecting fees for a long menu of on-board extras. In June, 87.4% of the seats on domestic flights were full, a new record for the industry.
The nation’s largest airlines collected $3.3 billion in checked bag fees for 2013, compared with $1.1 billion in 2008.
Once the merger of American Airlines and US Airways is completed, four of the nation’s carriers will control about 80% of all domestic air traffic, according to federal studies.
To read more about travel, tourism and the airline industry, follow me on Twitter at @hugomartin.
Your guide to our new economic reality.
Get our free business newsletter for insights and tips for getting by.
You may occasionally receive promotional content from the Los Angeles Times.