These Airlines Charge the Most Extra Fees
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Fees, fees, and more fees — the airline industry is full of them, and there seems to be a new one every month.
These fees make up a large portion of many airline’s revenue. Specifically referred to as ancillary fees, these extras include paying for things like checked bags, seat selection or on-board food — essentially whatever’s not included in the initial cost of the ticket.
IdeaWorksCompany released its annual ancillary revenue rankings showing the top 10 carriers based on average fees charge per passenger:
- Spirit: $51 per passenger
- WOW Air: $49 per passenger
- Allegiant: $49 per passenger
- Frontier: $48 per passenger
- Jet2.com: $43 per passenger
- Qantas Airways: $43 per passenger
- United: $39 per passenger
- AirAsia X: $33 per passenger
- HK Express: $33 per passenger
- Wizz Air: $31 per passenger
Not surprisingly, the list was full of ultra-low cost carriers. US-based Spirit Airlines topped the rankings with its fees averaging $51 per passenger. Tied for second was Icelandic ULCC WOW Air and Allegiant, with Frontier coming in at close fourth.
Surprisingly, Qantas and United, both large legacy carriers ranked six and seven, respectively. This is likely due to the recent implementation of basic economy fares (even on international routes) and other fees by larger carriers so their fares can stay competitive with budget carriers. Remember, you can use a co-branded credit card to get around many basic economy fees — most provide free checked bags.
IdeaWorks found that baggage was the biggest income generator in the category of ancillary fees, which makes sense considering it’s quite hard to travel without any sort of luggage. It also discovered that one of the biggest boosts to Spirit’s ancillary revenue was its online booking fee, making up 33% of that revenue source. Surprisingly, it can actually be avoided if you book your ticket with a Spirit agent at one of their airport locations .
Spirit came in first on another list, which ranked ancillary revenue as a percent of total revenue:
- Spirit – 46.6%
- VivaAeroBus – 43.6%
- Frontier – 42.4%
- Wizz Air – 41.6%
- Allegiant – 39.8%
- Volotea – 34.2%
- WOW Air – 28.5%
- Ryanair – 28.2%
- Volaris – 27.7%
- Jet2.com – 27.6%
Predictably, the list is full of low-cost carriers who’s business models are essentially based on the bet that most passengers will be tacking on a thing or two to their tickets.
A final comparison ranked the revenue from frequent flyer programs in terms of how large of a chunk it contributed to their total ancillary revenue:
- Southwest – 79%
- Alaska – 64%
- American – 59%
- Delta – 56%
- Lufthansa Group – 43%
- United – 41%
- Air Canada – 41%
- Air France/KLM – 20%
Southwest and Alaska likely came out on top since neither have basic economy fares and Southwest doesn’t charge for the first two checked bags of every passenger.
For those who follow the industry, this news won’t come as a shock — airlines rely heavily on their frequent flyer programs and miles purchased by banks through credit card co-brand relationships to boost their profits. Delta receives about 35% of its revenue by selling miles to American Express and American about 50% through its co-brand relationships.
Featured image by Robert Alexander/Getty Images.
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