US Airlines' Ancillary Revenue Off 1%, Despite Higher Baggage Revenue

Date : 06/28/2010 @ 12:22PM
Source : Dow Jones News
Stock : Alaska Air Grp., Inc. (ALK)
Quote : 85.28  0.71 (0.84%) @ 7:55PM

US Airlines' Ancillary Revenue Off 1%, Despite Higher Baggage Revenue

Delta Air Lines (NYSE:DAL)
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U.S. airlines' first-quarter ancillary revenue dropped 1% from a year earlier as reduced reservation change fees and miscellaneous revenue offset an increase in baggage-fee proceeds, according to the U.S. Department of Transportation.

As the industry has flown through financial hardship over the past decade, fees have been added to many services and perks, from switching flights on a standby basis at some carriers to getting a window seat or bottled water at others. Carriers, which also in recent years have installed fees for travelers' first checked bags, were hit by a drop in demand during the downturn but are beginning to see stabilization.

Ancillary revenue dropped to $1.86 billion from $1.88 billion a year earlier, according to the Bureau of Transportation Statistics. Delta Air Lines Inc. (DAL), recently merged with Northwest, saw the metric jump 61% to $592.1 million, posting the steepest growth and highest value. JetBlue Airways Corp. (JBLU) had the biggest decline, 13%.

Baggage fee collections jumped by a third to $768.5 million, more than tripling at Alaska Air Group Inc.'s (ALK) Alaska Airlines and doubling at Delta, which collected more than any other carrier.

Reservation change fee collections declined 5.7% to $553.9 million. AirTran Holdings Inc. (AAI) collected nearly three times as much from change fees as last year while Delta's collections were up 90%.

Miscellaneous operating revenue--which includes items such as pet transportation and standby passenger fees--plunged by 25%, more than tripling at Delta and doubling at Southwest Airlines Co. (LUV), while AirTran, Spirit Airlines Inc. and Continental Airlines Inc. (CAL) saw declines of 34%, 40% and 75%, respectively.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240, matthew.jarzemsky@dowjones.com

 
 

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