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One year later: effects of airline baggage fees seen

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One year after most airlines began charging fees for checked bags, the damage to consumer’s pocketbooks, as well as the saving effect on airlines’ bottom lines, can be seen.

Without the revenue gained from baggage fees, the industry, which reported an operating profit of $361 million in the second quarter of 2009, would have reported an operating loss of $308.6 million for the quarter, according to numbers gathered from a report by the Bureau of Transportation Statistics.

The past four quarters netted the industry nearly $2.1 billion in baggage fee revenues.

In the second quarter, the airline industry made $669.6 million in revenue from baggage fees, which was a 275.7 percent increase in baggage fee collection revenue from a year prior.

Beginning in the second quarter of 2008, most of the scheduled passenger carriers began charging for first and second bags checked; previously, additional charges were not applied until a third bag was checked.

Yet the extra revenue from bag service serves as a buffer against bankruptcy for airlines that are hurting from higher fuel prices, decreasing customer demand and recent H1N1 flu scares, according to a CNNMoney.com report. Although customers complain about the fees, they are willing to accept them if ticket prices are kept down, according to analysts quoted in the CNNMoney.com report.

One airline, Frontier Air, increased its baggage revenue 981.4 percent to $13.5 million from $1.2 million a year ago. American Airlines and Delta Airlines each brought in more than $118 million in baggage revenue, compared to the $37 million and $42 million each earned respectively a year ago. American Airlines showed a 219.2 percent increase from the second quarter of 2008 and Delta showed a 176.1 percent increase. (See the full list)

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