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Old 06-23-2014 | 07:45 AM
  #160955  
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From: 767er Captain
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Originally Posted by TheManager
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.
I'll agree with you and disagree at the same time. While we are making lots of coin on fees and such, and yes it is true that everything that goes in the belly has a price attached to it (except the "courtesy checking" that goes on at the gate), I think it is best viewed like an old FDX friend told me once. He said "When you divert, you inconvenience a couple hundred people. When I divert, I inconvenience 250,000 people."

That being said, it is management's goal to have DAL viewed on Wall Street in the same vein as FDX/UPS/UNP etc... and not with SWA/AAL/UAL.