Airlines Made $4.2 Billion in Baggage Fees Alone Last Year. But Their Profits Still Plunged

May 03, 2017

Airlines in the United States made more than $4.2 billion in baggage fees, accounting for 2.5% of revenue last year, though the industry still saw overall profits significantly decrease.

Baggage fees were the highest area of profit growth, according to a release Tuesday from the Department of Transportation. Baggage-fee profit went up 10% in 2016 compared to 2015, an increase of about $372 million, according to the DOT.

The airline with the highest baggage-fee profits, American Airlines, made more than $1 billion in 2016, according to the report.

However, airline profits in the U.S. were down over $11 billion in 2016, bringing in $13.5 billion in 2016 compared to $24.8 billion in 2015. The Department of Transportation said in the release that while fuel costs decreased, labor rates went up by nearly as much and airlines also made less through fees for changing reservations. Fares ended up making $91.2 billion, only about a 1% increase from 2015, according to the report.

This comes after airlines testified before Congress Tuesday over customer service. The meeting was called after Dr. David Dao, a United Airlines passenger, was dragged off a flight. Dao and the airline eventually settled for an undisclosed amount.

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