Dear Mr. Fun,

Stop the madness. Wake up.

The amount of money Delta and all of the airlines are making in ancillary fees, baggage being a large portion of the haul, is formidable. This article below doesn't even address the cargo initiative drive and revenue Delta has booked.

Anything going into the belly now has a price tag attached to it. Not so before. So YES, you can put us into the same comparison as UPS and FedEx.

Additionally, they made more in change fees than luggage last year at Delta. Over $ 1.6 billion in just fees.

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


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.


Delta Is No. 1 as Profitable Air Cargo Beats U.S. Peers

Delta Air Lines Inc. (DAL), bucking an industry slump in cargo shipments, is packing more auto parts, mail and salmon into the bellies of its passenger jets to beat its largest U.S. competitors.

Delta is on a five-month streak of gains in cargo traffic, bolstering the bottom line ahead of tomorrow’s quarterly earnings report. The cargo operations produce $1 billion in annual sales and profit margins that have topped 50 percent because goods are flown on jets with fare-paying passengers.

The second-biggest carrier is jumping ahead of peers with a wider network after the 2008 purchase of Northwest Airlines, new markets and improved on-time performance. With the merger done, Delta is expanding in cargo while United Continental Holdings Inc. (UAL) finishes its own merger integration and American Airlines parent AMR Corp. (AAMRQ) reorganizes in bankruptcy court.

“People underestimate the benefit of Delta having integration behind them,” said Savanthi Syth, a Raymond James & Associates Inc. analyst in St. Petersburg, Florida. “United is still trying to combine networks and cargo space tends to be one of the last things that gets optimized. And American has been so focused on their bankruptcy.”

Delta surpassed United, the world’s biggest airline, in cargo tonnage in July as the Chicago-based carrier meshes former United parent UAL Corp. and Continental Airlines Inc. The Atlanta-based carrier’s cargo rose 1.1 percent through September while United’s fell 6.4 percent and American’s slid 1.2 percent.

Cargo Margin

“We have definitely outpaced our peers,” Chief Cargo Officer Tony Charaf said in an interview.

While Delta doesn’t typically give profit-margin details for the unit, Charaf’s predecessor, Neel Shah, said in 2010 that the figure was “well north” of 50 percent. The airline’s overall operating margin last year was 6.3 percent.

That means Delta’s $1.03 billion in 2011 cargo revenue, which made up only 2.9 percent of total sales, generated a greater share of profit. Analysts project third-quarter net income will climb 44 percent while United’s may drop 12 percent. AMR reported last week that its quarterly loss widened on the same basis.

“Delta is smart to be so aggressive on it, because almost all of that revenue falls right to the bottom line,” said Helane Becker, an analyst at Dahlman Rose & Co. in New York.

Sustaining Delta’s gains will require the airline to keep resisting the industry’s slowdown. Global cargo traffic is projected to shrink 0.4 percent this year while yields will drop 2 percent, the International Air Transport Association trade group said on Oct. 1.





After they are making rain billions, is everyone going to be ok with excepting coins in C15K?