Frontier Airlines adds a new revenue

Frontier Airlines earned around a quarter-billion dollars in baggage fees in 2015, while its bigger rival at Denver International Airport, Southwest Airlines, generated only a fifth as much baggage revenue despite carrying 11 times as many passengers.

Those figures, from a new report by the federal Bureau of Transportation Statistics, demonstrate the difference in business models between the two carriers.

Denver-based Frontier — the No. 3 airline at DIA based on passenger counts — posted $220,044,000 in baggage-fee revenue last year. Dallas-based Southwest — the No. 2 DIA carrier — collected $43,636,000 in baggage fees.

The disparity is easy to explain:

Frontier’s business model is low base fares coupled with ‘a la carte’ fees for most services, including checked and carry-on baggage for most passengers. (With its ‘best value’ fare booked online, passengers are charged $30 for the first checked bag and $35 for carry-on bags.
Southwest, meanwhile, lets passengers check two pieces of luggage for free.
The difference is even more striking given that Southwest carried 144.6 million passengers last year to Frontier’s 13.2 million, according to federal data.

Meanwhile, United Airlines — the No. 1 DIA carrier — took in $672,222,000 in baggage-fee revenue last year, the BTS said. It carried 95.3 million passengers in 2015.

The top US airline for baggage-fee revenue last year was the newly merged American Airlines and UA Airways, with a combined $1.125 billion, followed by Delta ($875.1 million), United, Spirit Airlines ($288.7 million) and Frontier.