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US Airlines Make $4.2b in Baggage Fees

US Airlines Make $4.2b in Baggage FeesUS Airlines Make $4.2b in Baggage Fees

Airlines in the United States made more than $4.2 billion in baggage fees, accounting for 2.5% of revenues last year, though the industry still saw overall profits decrease significantly.

Baggage fees were the highest area of profit growth, according to a statement on Tuesday from the US Department of Transportation. Baggage-fee profit went up 10% in 2016 compared to 2015, an increase of about $372 million, the DOT was cited as saying by Fortune.

The airline with the highest baggage-fee profits, American Airlines, made more than $1 billion in 2016, according to the report.

However, airline profits in the US were down over $11 billion in 2016, bringing in $13.5 billion in 2016 compared to $24.8 billion in 2015.

While fuel costs decreased, labor rates went up by nearly as much and airlines also made less through fees for changing reservations.

Fares ended up making $91.2 billion, only about a 1% increase from 2015, according to the report.

This comes after airlines testified before Congress on Tuesday over customer service. The meeting was called after David Dao, a United Airlines passenger, was dragged off a flight. Dao and the airline eventually settled for an undisclosed amount.

 

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