Airlines Clean Up With Fees

One of the ways that many companies raise capital is through charging fees. These fees are usually charged on top of regular service prices, allowing companies to advertise low rates, and then make up for it by tacking on the fees. It is hard to find an industry that has been more successful at this than the airline industry. In the last year or so, we have seen a definite uptick in airline fees, from baggage fees ($15 for the first checked bag and $25 for each additional) to higher cost in-flight meals and snacks to even adding surcharges for busy travel days.

Indeed, reports BusinessWeek, airlines took in $10.3 billion in revenue from fees last year. In the second quarter of 2009, world airlines managed to take in $670 million in checked bag fees alone. This is an increase of 276% from the previous year. Nice, eh?

Of course, it is worth noting that if you tack on too many fees, customers will start to get annoyed, and go elsewhere. It’s hard to get around airline fees, since how else will you travel so conveniently? However, other businesses find that too many fees can lead customers to go to competitors, or to do without.

Image source: cliff1066 via Flickr