Hawaiian Airlines has no plans to drop its money-making fees for checked baggage and reservation changes when Southwest Airlines enters the Hawaii market.
The state’s largest carrier took in $26 million from those fees in the second quarter, according to federal data released Wednesday.
A Southwest official, in Honolulu for an annual tourism summit, said Tuesday that when the Dallas-based carrier begins Hawaii service it will continue its policy of not charging fees for the first two checked bags, reservation cancellations or flight changes. Southwest has not announced a date for the start of its Hawaii service.
When asked if Hawaiian would consider dropping its fees to match Southwest, Hawaiian spokeswoman Ann Botticelli said, “We have no plans to alter our product.”
“We are very proud of our superior service and hospitality, which includes complimentary meals in the main cabin,” Botticelli added.
Hawaiian took in
$20.5 million in baggage fees during the second quarter and an additional $5.5 million in reservation cancellation and change fees, according to the U.S. Department of Transportation. Those numbers compare with $21 million and
$5.7 million, respectively, in the year-earlier quarter.
“Fees help pay for the costs associated with handling and transporting bags, or canceling/changing a ticket,” Botticelli said. “This system has the benefit of having guests pay for what they consume, rather than spreading the cost of baggage handling to those who do not check bags. Reservation and cancellation fees apply to non-refundable 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 offset some of the lost revenue.”
The much-larger Southwest Airlines collected
$12.3 million in baggage fees. It charges for overweight or oversized luggage or if three or more bags are checked in.
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.
Island Air, the state’s second-largest carrier, saw its baggage-fee revenue more than double in the second quarter after expanding service to Kona in June 2016 and adding more interisland routes systemwide. Island Air brought in $1.8 million in such revenue during the quarter, up from $822,000 in the year-earlier period. The airline’s reservation cancellation and change fees rose nearly
40 percent to $155,000 from $111,000.
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 $1.18 billion in baggage revenue during the quarter, up 9.6 percent from $1.07 billion in the year-earlier quarter. American Airlines, the world’s largest airline, led the way with $302 million in baggage revenue.
The same airlines, excluding Southwest, reported $737.4 million in reservation cancellation and change fees during the quarter, down 2.3 percent from $755 million in the year-ago period. Southwest doesn’t charge for flight changes
or cancellations. American collected the most in change fees at $228.4 million.
