Hawaiian Air reaps $104M from raft of fees

Hawaiian Airlines’ fees are adding up to big numbers as the state’s largest carrier continues to grow.

For the second year in a row, Hawaiian topped the $100 million mark in fees for checked bags, canceled reservations and flight changes, according to data released Tuesday by the U.S. Department of Transportation.

In a year when Hawaiian transported a record 11.1 million passengers, the airline hit an all-time high in 2016 with $82.4 million in baggage fees, up 1.5 percent from the $81.2 million it received in 2015. Checked bags include oversize and overweight luggage.

Reservation cancellation and change fees, while not a record, hit $21.6 million, up 6.8 percent from $20.3 million in 2015.

Together the baggage, cancellation and change fees totaled just more than $104 million, up 2.6 percent from $101.4 million the previous year.

Even though Hawaiian set a record for baggage fees for the year, the amount it collected in the fourth quarter actually dropped 1 percent to $19.3 million from $19.5 million in the year-earlier period. Hawaiian doesn’t charge for the first two checked bags on international routes.

“Our baggage revenue was generally consistent with domestic passenger trends for the fourth quarter and full-year periods,” Hawaiian spokesman Alex Da Silva said.

Hawaiian also took in $5.2 million in the final three months in cancellation and change fees. That was 8.2 percent above the $4.8 million it collected in the fourth quarter of 2015.

“Fees are collected to pay for the costs associated with handling and transporting bags or canceling/changing a ticket,” Da Silva said. “Reservation and cancellation fees apply to nonrefundable tickets purchased at reduced rates. When such a ticket is purchased, we take that seat out of inventory. When it is released back into the inventory — often at the very last minute — we have lost our ability to sell it, and our fees help cover some of the lost revenue.”

Hawaiian, which generated $2.45 billion in revenue in 2016, is not alone in its dependence on such fees as a significant part of its income stream. The 13 reporting U.S. airlines raked in $4.2 billion in baggage fees last year and an additional $2.9 billion in cancellation/change fees to bring the combined total to $7.1 billion.

Island Air, the state’s second-largest airline, took in $1.1 million in baggage fees during the fourth quarter to boost its full-year total to $3.6 million while it generated $118,000 in cancellation/change fees to end the year with $457,000. Island Air’s full-year numbers in 2015 for baggage and cancellation/change fees were $2.8 million and $316,000, respectively.

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 there has been no turning back.

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.

Island Air increased its baggage fees Nov. 15 and now charges $25 for a first checked bag and $35 for a second. That’s up from $15 and $25, respectively. Island Miles members pay $15 for the first checked bag and $20 for the second.