Spirit Airlines generates 38.5 percent of total revenue from fees
Media reports quoting a study by aviation experts have said that Miramar-based Spirit Airlines had succeeded in generating the highest percentage of revenue from extra fees. A new report published by IdeaWorks Co., a Wisconsin consultant on airline fees, said that Spirit Airlines has generated 38.5 percent of its total revenue from extra fees in 2012. The earnings are more than all other U.S. carriers.
Misty Pinson, spokeswoman of Spirit Airlines, said that breaking out options and charging a low fare, and also allowing the customers to pick and choose the services they want have been an important part of the airline’s low-cost, low-fare business model.
The study said that a total of 53 airlines worldwide generated $27.1 billion in passenger fees and other extra charges in 2012, as compared to $22.6 billion collected by 50 carriers in 2011. The surging fuel prices have over the years forced airline to find other options to generate money without raising airfares. Ever since 2008, extra charges such as baggage fees and charges to upgrade to roomier seats have become a major source of revenue for most airlines worldwide.
According to the study, Spirit Airlines and Allegiant Airline are among the top low-cost airlines leading the high-fee, low-fare trend over the past few years. However, on the contrary major carriers, particularly big European airlines, are now increasingly turning to passenger fees to boost revenue.
The study outlined that among the major U.S. carriers United Airlines was at the top in fee revenue with $5.4 billion. Delta Air Lines followed United Airlines to emerge No. 2 with $2.6 billion, while American Airlines was in the third position with $2 billion of revenues from extra fees.