Jetrader - September/October 2010 - 29

Is That a Lawsuit in Your Luggage?
By Don Mitchell

A

Ancillary revenue is big business for the airlines. The U.S. Bureau of Transportation Statistics (BTS) reported that for the first quarter of 2010, ancillary revenue was an average of 6.2 percent of total operating revenue for U.S. airlines. Industry consultant Robert Mann of R.W. Mann & Co. says airlines generate, on average, between $12 and $15 in ancillary revenue from each passenger not accounting for fees waived for elite fliers. Baggage fees make up the largest portion of ancillary fee revenue. For the same quarter, American Airlines checked in $128.5 million in bag fees according to BTS, with US Airways and Continental falling just behind with $120.7 million and $76.6 million, respectively. Delta packed up nearly $218 million for the quarter. Baggage fees and charges for other “unbundled” services are now critical revenue streams and alone could make the difference between a profit and a loss. Charging for what was once included in the ticket price has its consequences, however.

American Airlines was recently sued in Washington state (Covarrubias v. American Airlines, Inc.) over baggage fees. The suit alleges that American’s passenger sought, and was denied, a refund of her baggage fee after her luggage was delayed and considered lost. Her complaint, which also seeks class action status, seeks damages for breach of contract and other claims for those in the class whose bags were, “lost, delayed, damaged, or destroyed during travel in the United States as well as flights originating from the United States to foreign destinations.” The basic argument is that if the airlines charge a baggage fee, they must refund it if they fail to deliver the bag on time and in the same condition as when it was checked. In news reports, American denied that the bag was lost and stated that refunds may be sought as part of the passenger’s lost or delayed baggage fee claim. The U.S. Department of Transportation reports that nearly 27,000 mishandled baggage reports Jetrader 29



Table of Contents for the Digital Edition of Jetrader - September/October 2010

Jetrader - September/October 2010
A Message from the President
Contents
Calendar/New
Q&A: Dr. Alan Epstein
Commercial Outlook is Up as Economies Rebound
Crisis, What Crisis?
The Big Question
Funding Fundamentals
Is That a Lawsuit in Your Luggage?
AFRA Sets Ambitious Challenge for Aircraft Recycling Sector
Road to Recovery
Remembering Hafthor Hafsteinsson
License to Fly
Aircraft Appraisals
From the ISTAT Foundation
Aviation History
Advertiser.com/Advertiser Index
Jetrader - September/October 2010 - Jetrader - September/October 2010
Jetrader - September/October 2010 - Cover2
Jetrader - September/October 2010 - A Message from the President
Jetrader - September/October 2010 - 4
Jetrader - September/October 2010 - Contents
Jetrader - September/October 2010 - 6
Jetrader - September/October 2010 - Calendar/New
Jetrader - September/October 2010 - 8
Jetrader - September/October 2010 - Q&A: Dr. Alan Epstein
Jetrader - September/October 2010 - 10
Jetrader - September/October 2010 - 11
Jetrader - September/October 2010 - Commercial Outlook is Up as Economies Rebound
Jetrader - September/October 2010 - 13
Jetrader - September/October 2010 - 14
Jetrader - September/October 2010 - 15
Jetrader - September/October 2010 - Crisis, What Crisis?
Jetrader - September/October 2010 - 17
Jetrader - September/October 2010 - 18
Jetrader - September/October 2010 - 19
Jetrader - September/October 2010 - 20
Jetrader - September/October 2010 - The Big Question
Jetrader - September/October 2010 - 22
Jetrader - September/October 2010 - 23
Jetrader - September/October 2010 - Funding Fundamentals
Jetrader - September/October 2010 - 25
Jetrader - September/October 2010 - 26
Jetrader - September/October 2010 - 27
Jetrader - September/October 2010 - 28
Jetrader - September/October 2010 - Is That a Lawsuit in Your Luggage?
Jetrader - September/October 2010 - 30
Jetrader - September/October 2010 - 31
Jetrader - September/October 2010 - AFRA Sets Ambitious Challenge for Aircraft Recycling Sector
Jetrader - September/October 2010 - 33
Jetrader - September/October 2010 - 34
Jetrader - September/October 2010 - 35
Jetrader - September/October 2010 - Road to Recovery
Jetrader - September/October 2010 - 37
Jetrader - September/October 2010 - 38
Jetrader - September/October 2010 - Remembering Hafthor Hafsteinsson
Jetrader - September/October 2010 - 40
Jetrader - September/October 2010 - 41
Jetrader - September/October 2010 - 42
Jetrader - September/October 2010 - License to Fly
Jetrader - September/October 2010 - 44
Jetrader - September/October 2010 - Aircraft Appraisals
Jetrader - September/October 2010 - 46
Jetrader - September/October 2010 - From the ISTAT Foundation
Jetrader - September/October 2010 - Aviation History
Jetrader - September/October 2010 - 49
Jetrader - September/October 2010 - Advertiser.com/Advertiser Index
Jetrader - September/October 2010 - Cover3
Jetrader - September/October 2010 - Cover4
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