Transportation

Delta Keeps Its Edge in Airlines' Quest for a Billion Dollars in Baggage Fees


Passengers check their luggage at the Delta counter at Hartsfield-Jackson Atlanta International Airport on Sept. 27, 2013

Photograph by John Amis/AP Photo

Passengers check their luggage at the Delta counter at Hartsfield-Jackson Atlanta International Airport on Sept. 27, 2013

One of these days, despite the best efforts of frugal travelers to fly with less luggage, some crafty airline is going to make $1 billion a year from baggage fees. Delta (DAL) is still leading the incremental charge to that milestone.

The carrier collected $833 million last year just from slinging bags, more than any other airline, according to data released today by the U.S. Department of Transportation. Delta made slightly more by charging passengers for changing or cancelling reservations, another category in which it bested all other airlines. Almost 5 percent of Delta’s revenue now comes from these add-on fees.

As airlines get craftier, however, so too do travelers. Baggage revenue at Delta and United Continental (UAL) slumped 7.2 percent last year, even though the carriers collectively flew about the same number of passengers as they did in 2012. All told, baggage fees dropped 4 percent in 2013. And the other major airlines aren’t far behind Delta. Here’s a full breakdown of the data:

In all fairness, Delta moves a lot of people around—far more than say Hawaiian Airlines (HA), No. 9 on the baggage-fee list. And its fees at the moment aren’t particularly egregious as far as these things go: After one free carry-on, the first checked bag costs $23.

There are far more flagrant luggage fees out there. US Airways, for instance, is collecting $125 for a third checked bag. Southwest (LUV), which makes a big deal out of its “bags fly free” policy, charges $75 for luggage weighing more than 50 pounds (up from $50).

When one breaks the fees down per domestic passenger, some smaller carriers shoot to the top of the list. Spirit Airlines (SAVE), which charges travelers for pretty much everything but wearing shoes, collected almost $20 in baggage fees per customer last year. No wonder it is both so profitable and so deplored. With a charge of $50 for one carry-on bag, it’s surprising Spirit didn’t realize a larger haul. Frontier (FRNT) may make a similar impression this year after introducing a $50 fee for the pleasure of jamming a carry-on into the overhead bin.

Kyle-stock-190
Stock is an associate editor for Businessweek.com. Twitter: @kylestock

Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • DAL
    (Delta Air Lines Inc)
    • $38.64 USD
    • -0.80
    • -2.07%
  • UAL
    (United Continental Holdings Inc)
    • $49.38 USD
    • -0.52
    • -1.05%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus