Originally Posted by
hazelrah
The juries still out on the efficacy of the bag fees. There is no doubt that the bag fees are a short term tonic to the bottom line. As an example Delta has implemented the bag fees and pumped up its revenue stream; however its traffic keeps falling like a stone. it can't cut capacity fast enough. Also they have had to cut base fares in a competitive marketplace. To me the bag fees just seem another price obfuscation mechanism.
Did you happen to note the details I posted earlier about AirTran's most recent results and how the increase in ancillary revenue from things like bag fees and seats (+$30m) were critical in their $10m profit?