Airline profits are soaring high, at least for the three major domestic carriers, mostly thanks to fees the airlines have passed on to passengers.
While it’s nice to see American companies doing well in this tough economy, much of this success has come from airlines squeezing the consumer for more money.
As we reported in September, more travelers are gearing up to fly this year, yet most airlines have decided not to increase the number of flights available or reverse cost cutting measures implemented during the recession. As a result, airlines are able to increase fares because demand is higher but the supply is mostly unchanged.
On top of this, airlines implemented tons of new fees during the recession to raise revenues, as consumers know all too well. In fact, one report found that domestic airlines earned nearly $900 million in the second quarter from baggage fees and another $600 million from reservation change fees.
Each of the three major airlines has experimented with extra fees. American has added fees for renting pillows and blankets, checking a single piece of luggage and to sit in the front row. US Airways charges fees for basic snacks and seats with extra legroom. And Delta charges extra booking fees and for the first checked bag.
So unfortunately, these companies really have been rewarded for bad behavior.
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