Airline profits soar and fliers are sore
Squeezed passengers and a flood of fees are fueling an uptick in customer complaints
Cheap fuel prices juiced record profits for U.S. airlines last year even as customer complaints soared over cramped flights and mounting fees.
The 25 U.S. passenger airlines logged a record $25.6 billion in profits in 2015, more than three times the industry’s after-tax earnings of $7.5 billion reported in 2014, the Transportation Department said Monday.
Fuel prices averaged 35% lower in 2015 than the previous year. The average fare of $377 in 2015 is down 3.8% from 2014 and down 19.2% from the inflationadjusted average of $467 in 2000, Transportation Department records show.
But baggage fees added $3.8 billion to the bottom line, and fees from reservation changes chalked up an additional $3 billion, the department said. Among extra fees, airlines report only baggage and reservation fees to the department.
Though airlines’ financial books look robust, passengers grumble about lost bags, deceptive ticket prices, poor customer service and shrinking seats and legroom. Travelers filed 20,170 formal complaints last year, up from 15,539 in 2014, according to the department’s Air Travel Consumer Report.
Airlines have invested $1.4 billion a month in new aircraft and equipment while paying down $8 billion in debt last year and returning $10.5 billion to shareholders last year, according to Melanie Hinton, spokeswoman for Airlines for America, an industry group representing most of the largest carriers.
Trey Bohn, executive director of the group Travelers’ Voice, said the $7 billion in baggage and reservation fees total nearly the economy of the Bahamas — and are the sources of most concern among travelers. “Depending too much on revenue from these fees is not only an operating weakness, it also suggests to travelers that the nickel and the dime are more important than improving their product,” Bohn said.
The investments haven’t helped consumers, said Charles Leocha, a founder of the consum- er advocacy group Travelers United.
Theplanes have more seats and less legroom to eke out more money, he said. “Everybody keeps telling us that we’re seeing all these improvements, but nobody’s seeing them. New airplanes don’t help us when ... they’re squeezing more people into them.”