Airlines Will Make $82 Billion Off Those Extra Fees You Paid in 2017
Airlines are raking in some serious cash at their customers' expense. According to a joint study by consulting firm IdeaWorks Company and Cartrawler, U.S. airline carriers could bring in a record $57 billion in fees this year alone. Additionally, the report noted that on a global level airlines are well on their way to making a total of $82.2 billion in 2017.
That $57 billion, Travelmole explained, comes mostly from what is known as “ancillary fees.” These fees include baggage fees, onboard services like meals and movies, sales of frequent flier miles, travel retail, and more. And the report found each passenger generates about $20 in fees per trip. That number may not seem high, but it’s a huge leap from the $4.54 per passenger airlines made in 2010.
"The economic boon of ancillary revenue has proven to be a highly useful tool to fix airline finances. It delivers profit-boosting results during times of severe economic distress, and works effectively to lift profits even higher when airlines are achieving investment-grade margins," the report stated. "But airlines should tread carefully. A la carte pricing works best when consumers are truly free to choose the product that best meets their needs."
The report even noted that it’s “reasonable to suggest ancillary revenue will someday exceed the airline industry's annual fuel bill.”
So how have airlines been able to get away with this? It’s through a practice known as “unbundling,” meaning once upon a time airlines would bundle all their extras together into the price of your ticket including in-flight meals, movies, and baggage. Now, however, to make it appear as though tickets cost less, airlines have made all of those extras available for a fee, meaning you’re not really saving money in the end. But don’t worry, there are still ways to save.
Check to see if your airline charges extra for a checked bag. If it does, try your best to pack a carry-on only. As baggage fees can range between $25 to $50 per passenger, this could add up to some serious savings for families.
Since most airlines now charge for even basic food choices, it may be a good idea to pack your own snacks before heading to the airport. A cut up apple and peanut butter or some veggie sticks with hummus could go a long way. Just make sure you don’t bring any snacks of the liquid variety, as they won’t make it past security.
Load up your laptop or device with movies.
Have Netflix or Amazon Prime? Try downloading your content before takeoff so you won’t have to splurge on a $7 movie rental mid-air.
Don’t forget your cozy items.
Next time you fly, make sure to pack your own blanket and pillow, or at the very least a large sweatshirt you can ball up, because those kinds of luxury items are often reserved for first-class passengers only.