Hawaiian snags $56M in bag fees

Baggage fees are turning into big bucks for Hawaiian Airlines.

The state’s oldest and largest carrier raked in a company-high $56.6 million from bag fees in 2011, bucking a national trend that saw U.S. airlines’ revenue from bag fees fall for the first time since they started collecting them, according to data released Thursday by the U.S. Department of Transportation’s Bureau of Transportation Statistics.

Hawaiian’s bag fees represented 3.4 percent of the $1.65 billion it made in total revenue last year, when the airline lost $2.6 million. Hawaiian’s loss included a pretax lease termination charge of $70 million tied to the purchase of 15 Boeing 717-200 interisland aircraft that Hawaiian had been leasing.

Hawaiian’s bag fees have steadily risen through the years and were up 4.8 percent in 2011 from the previous high of $54 million in 2010. The airline had $38.2 million in bag fees in 2009, $11.6 million in 2008 and $4.5 million in 2007.

"We’re taking in more fee revenue because we’re growing," Hawaiian Airlines spokes­man Keoni Wagner said, noting that the bag fees only partly offset a $190 million increase in fuel expenses from the previous year.

The 17 major domestic airlines made $3.36 billion from bag fees in 2011, down 1 percent from $3.4 billion in the previous year.

Delta Air Lines made the most in bag fees of any U.S. carrier last year with $863.6 million, exceeding the $854 million in net income it had in 2011.

American Airlines generated the second most in bag fees at $593.5 million even as its parent company, AMR Corp., lost $2 billion for the year.

While most of airlines’ bag fees come from checked bags, the carriers also generate income from overweight and oversize bags.

Fees for first and second checked bags began in 2007 when fuel prices soared to all-time highs. But many airlines charged extra for overweight or oversize bags before then.

Some carriers like Miramar, Fla.-based Spirit Airlines and Las Vegas-based Allegiant Air, which will begin serving Hawaii next month, have upped the ante by charging for carry-on bags. Spirit plans to increase its carry-on bag fee to $100 apiece starting Nov. 6, up from the $45 it currently charges. Allegiant recently began charging up to $35 for a carry-on bag. Those two airlines don’t charge, however, for any bag that can fit underneath the seat.

Spirit, the first U.S. carrier to charge for carry-on bags, made $134 million in bag fees in 2011, up 64.4 percent from $81.5 million in 2010.

Wagner said Hawaiian has no plans to charge for carry-on bags.

Hawaiian also generated $17.4 million last year from reservation cancellation and change fees, but that was down 4.6 percent from $18.2 million in 2010. Overall, U.S. carriers made $2.4 billion in reservation cancellation and change fees in 2011, up 3.6 percent from $2.3 billion in 2010.

Combined, Hawaiian made $73.9 million in bag, cancellation and change fees last year, up 2.4 percent from $72.2 million in 2010. Overall, U.S. carriers made $5.74 billion from bag, cancellation and change fees in 2011, up 0.8 percent from $5.69 billion in 2010.

Last year Hawaiian raised its checked-bag fees for interisland travel and slightly revised its checked-bag fees for mainland flights.

On Sept. 1 Hawaiian began charging $17 apiece for a first and second checked bags for interisland travel, up from the $10 for the first bag and $17 for the second bag that it previously charged.

For mainland travel Hawaiian changed its policy on Jan. 16 last year and began charging $25 for a first checked bag and $35 for a second checked bag regardless of whether it was checked in online or at the airport. Previously the charge was $23 for online check-in and $25 at the airport.

Hawaiian doesn’t charge for the first or second checked bag on international flights.