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1. Airlines see revenue increase from fees

Zach Bennett decided not to fly on Delta Air Lines this month after learning that the fee for taking his dog, Matilda, along was more expensive than his own ticket between Denver and Salt Lake City.

Delta charges $250 round trip to transport a pet — $52 more than the ticket Bennett considered buying for himself. He flew on Southwest, which charged $150 round trip for Matilda.
AIRLINE FEES CHART: What you'll pay to check a bag, change your ticket, more
"Southwest was more reasonable, but still, $75 each way was too much for Matilda to fly under my seat," says Bennett of Fort Collins, Colo. "Some fees are understandable, but the airlines have gone too far."
STORY: Airline fees reach $400 mark, USA TODAY survey finds
Airline fees for products and services, such as checking bags, rebooking flights and taking along pets, keep inching up. Airlines have become increasingly dependent on them for revenue. And they're a continuing source of disgruntlement for many fliers who keep looking for ways to avoid them.
During the first three months this year, U.S. airlines collected a record $1.38 billion in fees to check baggage and change reservations, the Transportation Department's Bureau of Transportation Statistics reported on Sept. 13.
That's $59 million more than they collected in the first quarter of last year, and $1.1 billion more than the first three months of 2007, when extra fees first began to appear.
"Ten years ago, airlines just raised fares," says Michael Boyd, an aviation consultant in Evergreen, Colo. "Today, ancillary revenues are a key part of the revenue stream and have resulted in fares not increasing as much."
The emergence of fees reflects a change in how airlines market and price themselves — and cover their costs. By unbundling the price of flying from a lump-sum ticket, airlines force travelers to choose the products and services they want to buy. They're also allocating part of the costs of getting people from one place to another based on the services passengers choose.
"Bag fees are an example of product unbundling that allows carriers to better align the total price a passenger pays with the cost of providing that service," says Darin Lee, an airline expert for Compass Lexecon, an economic consulting company. "Passengers who check bags impose additional costs on the airline, and bag fees are a means to pass that cost along to the passenger."
U.S. airlines lost more than $65 billion in the last decade and learned that airfares cannot cover their costs, says Steve Lott, a spokesman for the Air Transport Association of America, which represents U.S. airlines.
"Airlines have restructured to resume a path toward sustained profitability," he says. "Without sustained profitability, airlines cannot add routes, add workers or buy new airplanes."

2. US House approves aviation, highway funding bill

(Reuters) - The U.S. House of Representatives on Tuesday approved legislation temporarily renewing aviation and highway construction programs.

The measure now heads to the Senate where approval is expected before week's end.

Federal Aviation Administration (FAA) airport construction programs would be extended through January, while similar Transportation Department funding authority for road and transit upgrades would run through March, under the House-approved plan.

The legislation, which aims to avert shutdowns of both programs, also authorizes collection of gasoline taxes through the first quarter of 2012.

Current FAA funding expires on Friday, while highway programs would end on Sept. 30 without an extension of funding.

The House and Senate have struggled in recent years to craft long-term funding measures for FAA and highway and transit agencies, requiring Congress to keep them going with short-term extensions.

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Airlines see revenue increase from fees

USA Today

"Ten years ago, airlines just raised fares," says Michael Boyd, anaviation consultant in Evergreen, Colo. "Today, ancillary revenues are a key part of the revenue stream and have resulted in fares not increasing as much." The emergence of fees reflect ...

US House approves aviation, highway funding bill

Reuters

WASHINGTON, Sept 13 (Reuters) - The US House of Representatives on Tuesday approved legislation temporarily renewing aviation and highway construction programs. The measure now heads to the Senate where approval is expected before week's end. ...

Dale Klapmeier Named CEO at Cirrus Aircraft

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