10/28/2008

Airlines are reporting big jumps in ancillary revenue, driving a trend toward even more a la carte pricing in the industry. Alaska Airlines said its fee revenues increased 70% in the third quarter, while JetBlue Airways saw a nearly 100% jump in the average fees it collects from each passenger. "We expect these new revenue streams to generate well over $1 billion in 2009, a $400 million increase relative to 2008," United Airlines COO John Tague said. Analysts predict menu pricing is likely to increase. "The trend toward unbundling is accelerating," according to Darin Lee of the airline consulting firm LECG.

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