Baggage-fee revenue drops for Hawaiian

Hawaiian Airlines’ baggage fee revenue declined in the first quarter even though the state’s largest carrier transported more passengers than in the year-earlier period.

In what has become an important revenue source for all airlines, the state’s largest carrier generated $19.1 million from checked, overweight and oversized bags during the January-­March quarter, according to new data released this week by the U.S. Department of Transportation. But that was down 3.8 percent from $19.8 million in the first quarter of 2016.

Hawaiian Airlines spokesman Alex Da Silva declined to speculate on why the baggage fee revenue dropped.

“The cost to check a bag is set,” he said. “The number of bags we transport fluctuates.”

The number of passengers that Hawaiian transported rose 2.2 percent during the quarter to 2.7 million, but that includes international passengers, who aren’t charged for checking their first two bags.

Hawaiian is in line with most airlines in charging $25 for a first checked bag and $35 for a second. On interisland flights HawaiianMiles members pay $15 and $20, respectively, for first and second checked bags. Hawaiian also offers special programs in which one or more bags can be checked for free.

Like most airlines, Hawaiian doesn’t charge for the first two checked bags on international flights.

American Airlines became the first major carrier to charge for a first checked bag when it assessed passengers $15 in May 2008 to help offset soaring fuel costs. Since then, airlines have been counting on those fees as they continually look for different ways, such as lie-flat seating and extra-room seats, to generate additional revenue.

While bag revenue dropped for Hawaiian, the company collected 10.6 percent more in reservation cancellations and change fees than in the year-earlier quarter. Hawaiian took in $5.6 million in such fees compared with $5.1 million in the year-earlier period.

Island Air, the state’s second-largest carrier, saw its baggage-fee revenue more than double after expanding service to the neighbor islands. Island Air brought in $1.5 million in such revenue during the quarter, up from $611,000 in the year-earlier period. The airline’s reservation cancellation and change fees also more than doubled, rising to $162,000 from $80,000.

Island Air charges $25 for the first checked bag and $35 for the second while Island Miles members pay $15 for the first checked bag and $20 for the second.

Overall, the 13 reporting U.S. airlines brought in $1 billion in baggage revenue during the quarter, up 5.4 percent from $974.5 million in the year-earlier quarter. American Airlines, the world’s largest airline, led the way with $272.8 million in baggage revenue. Island Air was last.

The same airlines, excluding Southwest, reported $723.6 million in cancellation and change fees during the quarter, down 2.9 percent from $745.1 million in the year-ago period. Southwest doesn’t charge for flight changes or cancellations. American collected the most in fees at $221.6 million.