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Airline already collecting the most passenger fees wants $1 billionmore in fees annually by grehh hernjer





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Airline already collecting the most passenger fees wants $1 billionmore in fees annually by
Article Posted: 03/05/2013
Article Views: 44
Articles Written: 1951
Word Count: 585
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Airline already collecting the most passenger fees wants $1 billionmore in fees annually


 
Business,Business News,Business Opportunities
In 2011, no U.S. airline pulled in more revenues from fees thanDelta. The airline collected an industry-leading $767 million inreservation cancellation and change fees, and another $863 millionin baggage fees. Delta isn't resting on its laurels, though.The carrier plans on charging passengers a whopping extra $1billion in fees annually by 2014. Delta isn't known as the most fee-crazed airline.

That titleis probably split between Spirit Airlines in the U.S. and Ryanairin Europe carriers that, infamously, charge for things such as carry-on bags and paying with a credit card not affiliated with the airline. Nonetheless, because Delta has amuch bigger network of routes than Spirit, and because it charges ahealthy number of fees, Delta collects the most total fee dollarsof any U.S. airline.

In the third quarter of 2011, Delta took in $814 million in "ancillary fees," which include charges for baggage, reservation changes, pettransportation, standby services, and anything else over and abovethe basic cost of an airline ticket. Delta's ancillary feerevenues for that quarter surpassed the total generated by the nextthree airlines combined American, U.S. Airways, and Southwest with $300 million, $245 million, and $232 million, respectively. ( MORE: Airlines ‘Only' Collected $3.36 Billion in Baggage FeesLast Year ) Now, reports the Minneapolis Star-Tribune , Delta's latest goal is to push the fee envelope further.Analysts say the Atlanta-based carrier, which merged withMinneapolis-based Northwest Airlines a few years ago, "plansto add $1 billion to its ancillary sales by 2014." Deltahasn't gone public with such an overt, off-putting moneygrab, though. Here instead is the airline's best spin: "What we really have a goal to do is to offer the customerexactly what they want," said Glen Hauenstein, Delta'sexecutive vice president of network planning and revenuemanagement.

"So if they want a base fare with a seat and nochecked baggage, we have a product for them. If they want freedrinks, if they want food, if they want to sit in first class, wehave a product for those folks, too." Of course, there's no such thing as free drinks or food onboard plans. Nor, for that matter, is there such a thing as"free" checked baggage. In one way or another throughfees or when factored into "bundled" flightprices passengers pay up. ( MORE: Hey Airlines, Do You Really Want to Split Families Up on Planes? ) The line that Delta and other airlines are trying to walk is one inwhich fee revenues are increased at the same time that customersaren't disgusted by the constant nickel-and-diming before andafter boarding the plane.

One way Delta hopes to collect more in fees is by temptingcustomers with a free service. Passengers are allowed to shop atAmazon.com on Delta flights at no charge. Delta takes some portionof Amazon purchases made on board its plane, but the airline alsohopes that once travelers get a taste of surfing the Web whileflying, they'll be more likely to pay up for non-restrictedWi-Fi on flights. Delta charges $12 for unlimited Internet on its planes during a 24-hour period,and monthly ($34.95) and annual passes ($399.95) are available aswell. Brad Tuttle is a reporter at TIME.

Find him on Twitter at @bradrtuttle . You can also continue the discussion on TIME s Facebook page and on Twitter at @TIME . MORE: The E.U. Wants Airlines to Cut Carbon. But Other Nations AreBalking.

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