Airlines Are Collecting $38.1 Billion Annually In Extra Fees

Extra Fees Earning 40 billion annually for airline providers

Extra charges for checking a second bag or carry-on? Seats with more legroom? Wi-Fi access? Airline carriers located all over the world are earning $38.1 billion annually by charging customers for just about every extra luxury possible.

According to the annual study by IdeaWorksCompany and CarTrawler, revenue from checked bags, changed reservations and a host of other additional fees jumped nearly 21 percent to an all-time high of $38.1 billion.

“This report shows ancillary fees have become a reliable source of revenue for airlines, and airlines know what they can do to increase it,” said Jay Sorensen, president of IdeaWorks.

In comparison, in 2007, airlines collected just $2.45 billion in ancillary revenue.

Ancillary revenue per passenger among 63 airlines worldwide increased by 8.5 to $17.49 compared to 2013 numbers. Low-cst carriers collected $2.9 billion, a year-over-year increase of 32.8 percent. Ancillary revenue among major U.S. airlines jumped more than $2.6 billion, or 18.7 percent.

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United collected the largest chunk of the ancillary charge market with $5.8 billion, followed by American/US Airways at $4.65 billion and Delta with $3.2 billion.

The rapid increase is in part attributed to airlines offering more perks. For example, early boarding, seats with more legroom, and express check-in times. The report also says sales associates at many airlinersĀ are also doing a better job of selling those perks upon check-in.

What’s next for ancillary fees? The entertainment sector is seen as the most likely area for growth. Many carriers such as Southwest Airlines, already offer cheap or even free satellite and internet services on their flights. Over time we will likely see an increase in those fees and more options for customers to enjoy… at a cost.