Good News for Airlines Overshadowed by Focus on Baggage Fees

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airplaneLosses 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.


Filed under: 24/7 Wall St. Wire, Airlines, Earnings
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