#Southwest airlines baggage fees 2014 full
#Southwest airlines baggage fees 2014 free

Miscellaneous fees, at $5.1 billion, generated the largest share of ancillary revenue for the year ended in the second quarter of 2014, followed by baggage fees at $3.4 billion, and reservation change fees at $2.9 billion. The much larger ancillary revenue figures often reported in the press include the sale of frequent flyer program miles (the largest source of airline ancillary revenue) and travel services such as hotel bookings and car rentals, but these categories are not included in the three DOT ancillary revenue categories. Department of Transportation, the report found that ancillary fees generated $11.4 billion in the year ended during the second quarter of 2014, which amounts to 7 percent of base passenger revenue. For some ultra-low-cost carriers like Spirit Airlines, Allegiant Airlines and now Frontier Airlines, miscellaneous fees include credit card fees, passenger “usage” charges, and boarding pass printing charges. Miscellaneous was described as a broad category that covers items like buy-on-board meals, inflight entertainment, Wi-Fi, priority boarding, blankets and pillows, and other fees. The report looked at the three major categories of fees - baggage, reservation change, and miscellaneous - to show the growth to date. During the past several years, said the report, airlines captured increasing amounts of revenue for non-ticket charges such as baggage fees, reservation change fees, and other fees, most of which are not included in DOT-reported average airfares.Īirlines have found that passengers are less price-sensitive when it comes to ancillary fees. What I found most interesting was the chapter on revenue, which included a section on ancillary fees.

#Southwest airlines baggage fees 2014 full

The report is chock full of data and observations about airline costs, revenues, margins, capacity and global trends for both network carriers - traditional airlines like American and United - and value airlines, like Spirit and JetBlue. Cherniavsky said, because it should generate an extra 25 cents of profit per share.Aviation consultancy Oliver Wyman this month released a major new report, Airline Economic Analysis. airline analyst in Vancouver, said in a note to clients.īut the trade-off is worth it, Mr. The fee will likely cause some defection that will reduce the expected revenue from the fee to $60-million annually from $100-million, Ben Cherniavsky, Raymond James Ltd. 'They gave us a differentiation we didn't have before.' The introduction of fees by rival carriers was a 'gift by our competition,' he noted. The defection rate among Southwest customers would be so large that it would wipe out any revenue gain generated by the fees, Mr. 'Common sense tells you you're going to anger a lot of people.' 'Customers hate bag fees,' Southwest chief executive officer Gary Kelly told reporters last week in Dallas.

#Southwest airlines baggage fees 2014 free

Southwest allows passengers two free checked bags and advertises heavily that bags fly free. 'With today's announcement from WestJet, it now opens the door for Air Canada to follow suit.'Īir Canada spokesman Peter Fitzpatrick said the airline is evaluating the WestJet announcement.īut Canada's largest carrier might want to emulate Southwest Airlines Co., which until now has served as the business model for WestJet. mainline peers), management has been reluctant to do so on domestic routes where WestJet previously did not do so,' Mr. trans-border segments (similar to the U.S. 'While Air Canada currently charges for first bags on U.S.

airline analyst Walter Spracklin said he expects Air Canada to follow suit.

Murray also raised his forecast for WestJet's share profit to $3.26 next year from his original forecast of $2.92. The baggage fees should generate $87.5-million in revenue for WestJet in 2015, said analyst Chris Murray, who follows Canada's airlines for AltaCorp Capital Inc., in Toronto. The change will lead to lower Econo fares and seat sale fares in the future, Mr. The charge applies only to Econo fares, but WestJet spokesman Robert Palmer said Econo fares will not fall by $25 immediately even though the rationale for the fee is that those who are checking bags are now paying their own way.