Those annoying fees pay off for airlines

By Aaron Smith, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- Fees for such things as checked baggage and soft drinks accomplished their purpose, boosting airline revenues for the sixth straight month, an industry group said Wednesday.

The Air Transport Association of America said passenger revenue jumped 25% in June, compared to the same month in 2009.

ATA spokesman David Castelveter said the rise in revenue stems from "a combination of improving economic conditions, increase in business travel and revenue from ancillary fees."

This is welcome news to the airlines, which have struggled with slumping demand because of the recession and volatile fuel prices over the last couple years.

To take the sting out of lost revenue, most airlines have tacked on a slew of extra fees, known as ancillary fees, for checked baggage, drinks, curbside check-in, pet travel and other services that used to be included in the price of fare.

Airline stock activity was mixed Wednesday.

The stock for AirTran (AAI) was down 4% after disappointing results and lower-than-expected profit. But the stock for U.S. Airways (LCC, Fortune 500) rose 3% after reporting earnings that beat estimates.

U.S. Airways Chief Executive Doug Parker said the earnings increase was a result of a three-year plan to "return to profitability, including reducing capacity, maintain cost discipline, increasing ancillary revenues and establishing industry-leading operational reliability." To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,776.91 93.33 0.53%
Nasdaq 4,997.46 5.52 0.11%
S&P 500 2,081.34 12.58 0.61%
Treasuries 2.23 -0.05 -2.06%
Data as of 3:19am ET
Company Price Change % Change
Bank of America Corp... 16.69 -0.25 -1.48%
Apple Inc 125.69 -0.31 -0.25%
Micron Technology In... 18.20 -0.12 -0.66%
Freeport-McMoRan Inc... 17.25 -0.59 -3.31%
Intel Corp 29.90 -0.14 -0.47%
Data as of Jul 7
Sponsors

Sections

Jared Fogle's weight loss success story is well known. But the success of Subway, the sandwich chain he's promoted for 16 years, is less well known. More

In an interview with CNN, Hillary Clinton bashed the treasury's decision to make a woman share space on the $10 bill. More

Samsung misjudged demand for its new phones, leading it to make more of the lower cost S6 than it could sell and not enough of the S6 Edge that people want, analysts say. More

Entrepreneur Guillaume Gauthereau is on a mission to build a 50 to a 100 acre sanctuary in New York to provide refuge to honey bees. More

The FTC and Florida's attorney general claim a debt relief operation has made millions from consumers by promising to help get them out of credit card debt, but instead stuck them with even more. More