Bag fees boost efficiency, revenues

09/26/2008 | TheStreet.com

Bag fees seem to be doing what fare increases often don't: boosting airline revenues. "A lot of times you see a $50 fare increase, then you look back at the end of the quarter and the average ticket price didn't go up at all," says Alaska Airlines CFO Brad Tilden. Bag fees, on the other hand, "do seem to work." Besides a boost in revenue, the fees are leading to fewer checked bags, helping to increase operational efficiency. US Airways has seen a "huge increase" in performance measures as checked baggage has dropped by 10%, resulting in fewer re-accommodations, off-airport deliveries and lost bag claims.

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