1. Airports

    Airline Bag, Ticket Fee Collections Set New Record of $7.5 Billion in 2017

    May 7, 2018
    According to data released by the U.S. Department of Transportation's Bureau of Transportation Statistics, airlines collected almost $4.6 billion in baggage fees in 2017 – a $400 million increase from the previous year.
    Related To: American Association of Airport Executives (AAAE)

    With airlines collecting almost $4.6 billion in baggage fees in 2017 – yet another new record – the American Association of Airport Executives (AAAE) again called on the U.S. airlines to drop their opposition to adjusting a local airport user fee known as the Passenger Facility Charge (PFC) that finances the construction of new runways, terminals, gates and other airport improvements.

    “With infrastructure investment high on the agenda in Washington, it’s time for Congress and the administration to see past the self-serving and contradictory rhetoric of the airlines and remove the federal strictures on local passenger facility charges that continue to hamper airport development,” AAAE President and CEO Todd Hauptli said.

    According to data released today by the U.S. Department of Transportation's Bureau of Transportation Statistics, airlines collected almost $4.6 billion in baggage fees in 2017 – a $400 million increase from the previous year. Airlines collected another $2.9 billion in reservation change and cancellation fees during 2017, for a total of almost $7.5 billion in ancillary fees.

    At the same time the airlines are collecting record baggage fees from their customers, airlines continue to oppose adjusting the federal cap on local PFCs, a user fee that must be justified locally, imposed locally and used locally on FAA-approved projects that enhance local airport facilities. The federal cap on the local PFC has not been adjusted since 2000. Despite misleading airline arguments, the PFC is not a tax and never goes to the federal Treasury, a fact verified by the non-partisan Congressional Research Service.

    Bag and Ticket Fee Facts

    • Airlines collected approximately $7.5 billion in baggage and reservation change fees in 2017 – an average of more than $20 million every day in combined ancillary fees.
    • The record fee collections last year follow an astounding $7.1 billion in bag and ticket fees in 2016.
    • Since 2008, airlines have charged flyers almost $60 billion in bag and ticket change fees.
    • Because bag fees are not taxed at the same 7.5 percent excise tax rate applied to base airline tickets, the Airport and Airway Trust Fund lost $343 million in foregone revenue in 2017 alone. Since 2008, the $34 billion in untaxed bag fees have cost the Trust Fund more than $2.5 billion in lost revenue. Those are funds that could have otherwise been spent on needed airport and air traffic control upgrades.

    PFC Facts

    • While airlines raked in almost $7.5 billion from bag and ticket fees last year, airports received less than $3.3 billion from the PFC in 2017.
    • Airlines charged more bag and ticket fees last year than airports collected via the PFC in 2016 and 2017 combined.
    • The federal cap on the PFC has not been adjusted since 2000 – 18 years ago. A child born on the day Congress last adjusted the PFC is now able to vote.