ATLANTA ( TheStreet) -- U.S. airlines collected about $4.3 billion in fee revenue in the first three quarters of 2010, an amount roughly equivalent to the industry's anticipated total profits for the year.
With the fourth quarter historically one in which airlines loses money, it is possible to include that nearly every penny of the industry's profits will result from fee income. U.S. airlines are expected to earn about $4 billion in 2010 after losing $23.7 billion the previous year.
Speaking at an investor conference last month,
(LCC) CFO Derek Kerr said the airline would have about $500 million in
The Bureau of Transportation Statistics on Monday reported fee revenue for the first three quarters. Among the individual carriers, Delta (DAL), the largest airline, had the highest fee revenue, about $1.3 billion. American (AMR) had about $785 million. Combined, United (UAL) and Continental had about $922 million.Avondale Partners analyst Bob McAdoo said data shows that per-passenger fee revenue has been declining since reaching a peak in February. "It's clear that people are changing their patterns of behavior," McAdoo said. "They are packing lighter and carrying fewer bags." Meanwhile, on Monday, Continental introduced a new fee called FareLock, which enables customers to hold a reservation and lock in the ticket price for 72 hours or for seven days without committing to actually buying the ticket. The fees begin at $5 for a 72-hour hold and $9 for a seven-day hold. "FareLock is an innovative option for customers who need extra time to plan their travel before purchasing a ticket," said Chris Amenechi, managing director of merchandising, in a prepared statement. Continental will continue to allow changes or a refund, without a fee, within 24 hours of booking. Aviation consultant Robert Mann said the new fee reflects that airlines seek to "find something customers say they want, (something) you categorically won't give them, and give it to them for a fee. "Now the question is, why would anyone buy it?" he said. -- Written by Ted Reed in Charlotte, N.C. . >To contact the writer of this article, click here:
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV