Study: Airlines to charge more fees in 2010

Study: Airlines to charge more fees in 2010
By Carol Pucci
Copyright © 2010, Chicago Tribune
February 1, 2010
http://www.chicagotribune.com/travel/ct-travel-airline-fees-going-up-story-20100201,0,5597113.story


The move by U.S. airlines to charge extra for services that used to be included in ticket prices is just beginning, and will grow to include more European and Asian carriers, according to research from the Centre for Asia Pacific Aviation (CAPA), an aviation consultancy based in Australia.

"We are just at the start of the movement to monetize services and products passengers used to receive as part of the ticket price," said CAPA Executive Chairman Peter Harbison in a report issued Wednesday.

Baggage fees are one of the fast growing ways airlines are earning extra cash. Others include charging for seat selection, in-flight services and products, sales of insurance, airport lounges access and sales of concert tickets, mobile phone credits and more.

"Airfares around the world, particularly in the U.S., have fallen sharply since the onset of the recession, making baggage fees (and other ancillary revenue items) an increasing lifeline for the airline sector," Harbison said.

U.S. airlines will earn $4 billion in baggage fees this year, CAPA estimates, with Delta and American Airlines the biggest collectors as of late last year. The movement to boost what the industry calls ancillary (merchandising) revenue is spreading to Europe, Harbison said. Airlines in Asia Pacific countries have been more cautious, but that could soon change.

"Full service airlines around the world are looking on with interest, and many are likely to attempt to follow the U.S. lead shortly," the report said.

"Asian carriers are already picking up on some of the 'other revenues' opportunities from charging change fees more often, service charges for frequent flier tickets, seat selection, lounge passes and more."

The full report is available at http://www.centreforaviation.com.

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