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The improved margins U.S. airlines showed in Q2 is partially attributable to the higher fees the...

The improved margins U.S. airlines showed in Q2 is partially attributable to the higher fees the industry now charges. For the quarter, it raked in $931B in baggage fees and another $661M from reservation fee changes. Southwest Airlines (LUV +0.1%), of Bags-Fly-Free fame, showed the most rapid pace of baggage revenue growth during the quarter of major carriers.
Comments (2)
  • Ronliv2004
    , contributor
    Comments (5) | Send Message
     
    when you offer something that is perceived as free, such as in this case with the first two bags fly free policy, many will bring a third or even fourth bag and not feel so bad having to pay for those to be transported while thinking they got a great deal(which they did) by not having to pay for the first two. This in fact will bring in more revenue than if you charged for the first and or second bag from the beginning...
    25 Sep 2012, 02:55 PM Reply Like
  • Ronliv2004
    , contributor
    Comments (5) | Send Message
     
    I am a flight attendant and study economics and am aware and look at how limited resources are allocated that have alternative uses...
    25 Sep 2012, 02:58 PM Reply Like
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