UPDATE: I posted the entry below Thursday evening. USA Today looked deeper into the release of news by a federal agency about change and cancellation fees. Here's a report on how much total revenue, including bag fees et al, airlines collected in the first half of 2009.
The U,S. Bureau of Transportation Statistics released a report today on the revenue U.S. airlines get from fees they charge to change or cancel a ticket. And despite how long I've followed the airline business, the numbers stunned me. The total for the first two quarters of 2009 were almost $1.2 billion. Yes, that's right, billion, and that's just for half a year.
The report -- and I can't remember seeing a breakout before by BTS of this data, although it may have been there all along -- broke out revenue data for most of the nation's scheduled airlines. The only carrier missing from the list ... try to guess now ... is Southwest. Of course. Southwest doesn't charge change fees so it has nothing to report.
Some of the big numbers for major airlines: American, $225 million; Northwest, $206 million; Delta, $187 million; United, $159 million; US Airways, $131 million; and Continental, $119 million. As just one example, American's revenue represents about 4.6 percent of its total revenue for the first six months of 2009.
Forgive me for not thinking much about this before, and thus my great surprise to realize how dependent most carriers are on the flow from each time a traveler has to make a last minute change. That will be $100 for a change in a computer system that costs pennies, and these days, may well free up a seat on a flight for sale at a higher fare. I won't ask again if any airlines might consider doing the consumer-friendly thing and reduce or eliminate some of the fees. They've got us right where they want us.
Airlines spent lavishly in recent years to upgrade their first- and business-class service, where fares can be eight times higher than the cheap seats back in economy. But the recession has hammered the luxury travel market so badly that carriers now are rethinking expensive overhauls of cabins to appeal to well-heeled travelers, and putting more emphasis on an "economy-plus" class of seats with more legroom and comfort for only a small price premium. Read more about the trend here.
This would appear to be passenger bill-of-rights week here at Winging It. The Monday column focused on the debate in Congress over legislation that would set a 3-hour limit on stranding planeloads of passengers on airport tarmacs during long delays in takeoff or landing. More analysis will follow next Monday, including my own take on an unofficial hearing on Capitol Hill yesterday on the issue.
The big news from the passenger rights hearing was a statement by Robert L. Crandall, the retired CEO of American Airlines, who endorsed efforts to force the industry to deal with the problem by setting a time limit on long delays. Here's an AP story on Crandall's remarks and the hearing.
Just as the issue is heating up and appearing to gain momentum in Congress, congressional leaders are postponing long-term aviation and highway legislation because of the need to focus on health care. Passenger rights provisions could be included in a larger bill to reauthorize the Federal Avaition Administration, but it's uncertain if the additions will stay. Read more of the big picture of transportation legislation here.
Today's column explores the fervent desire on the part of numerous travel consumer groups for Congress to force airlines to adhere to standards for long tarmac delays. Airlines are skeptical that the legislation will pass this fall, but adherents are going to make the case in an informal hearing of their own on Capitol Hill tomorrow. Read the column here.
I'm on the road -- on my way to Washington to tomorrow's hearing -- with limited access to e-mail until Wednesday. I will report to you what I can today and tomorrow,.
You may want to read this story in conjunction with the previous post from last night on worldwide airline losses. AMR Corp., American Airlines' parent, is raising more cash and making plans for changes in how many available airplane seats it puts in different markets. More details are in an AP story found here.
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