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Good News for Airlines Overshadowed by Focus on Baggage Fees

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Published
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Losses among U.S. airlines improved in the fourth quarter. That news mostly got buried because of astonishingly high baggage fees. But the focus on those fees misses the main point. Due to mergers and better load and route management, carriers have been helped at the bottom line. Declines in fuel prices also have been essential.

The government agency that tracks the carriers said of fourth-quarter airlines losses:

The largest scheduled passenger airlines reported a net loss of $145 million in the fourth quarter of 2012, improved from a loss of $602 million in the fourth quarter of 2011, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today in a release of preliminary data.

Buried much further down in the data:

Total revenue for all passenger airlines in the fourth-quarter of 2012 was $37.6 billion. All U.S. passenger airlines collected a total of $841 million in baggage fees and $610 million from reservation change fees from October through December 2012. Fees are included for calculations of Net Income, Operating Revenue and Operating Profit or Loss.

Total revenue for all passenger airlines for the full year 2012 was $159.5 billion. All U.S. passenger airlines collected a total in 2012 of $3.5 billion in baggage fees and $2.6 billion from reservation change fees.

Better to have the fees than another wave of huge airline losses.

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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