Airlines Made $5.7 Billion in Revenues in 2010 From Fees

VIDEO: Fees for baggage and reservation changes account for airlines profits.
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Airlines have made fees the norm, as they struggle to remain profitable despite high oil prices and the bad economy forcing many people to stay home, and apparently the tactic has worked.

The Department of Transportation's Bureau of Transportation Statistics (BTS) reported today that U.S. airlines collected almost $5.7 billion from baggage fees and reservation change fees in 2010.

American passenger airlines made an estimated profit of $2.6 billion in 2010, according to the ATA. More than $2.1 billion of that profit came from fees.

Baggage fees and reservation change fees were the two largest chunks at $906 million and $646 million respectively.

Delta made the most last year from bag fees with $952 million in revenue, according to the BTS. The recently merged United and Continental were in second with $655 million, followed by American ($580 million) and US Airways ($513 million).

In 2009, airlines raised $5.1 billion from ancillary fees and produced a net profit of $2.6 billion, but the industry still suffered a $2.4 billion loss.

"If they hadn't collected that much money in bag fees, then there would probably be two airlines and they could charge whatever they wanted," George Hobica, founder of airfarewatchdog.com, told ABC News.

If airlines did not drive profit through fees added on to airfares, they would have had to raise ticket prices for all customers. In this economy, Hobica says people simply don't fly as often if fares are raised.

"Airfares today remain an unmatched bargain -- in real terms when adjusted for inflation, it still costs far less to fly, even with ancillary fees included, than it did during the 1970s," the ATA said in a statement released today. "Without sustained profitability, airlines cannot add routes, add workers, or buy new airplanes -- all in the interest of airline customers and the global economy. Airlines have different revenue models, providing customers choices; just as with fees, customers have the option to pay for products and services -- such as advanced boarding, seat upgrades or food purchases that they value."

However, there is a limit to what customers will take when it comes to extra airline fees.

Last week, Delta Airlines came under criticism after charging members of U.S. Army Detachment 62 nearly $3,000 in baggage fees as some of the soldiers had an extra bag. According to a video posted on YouTube of two soldiers aboard the Delta flight, their military orders made clear that they were authorized to carry four bags.

Delta quickly changed its policy to allow soldiers to check four bags, free of charge.

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