There is a very interesting article on Bloomberg Businessweek about the ancillary revenues that the airlines are now collecting worldwide. You can access this article here.
Five years ago the ancillary fees that the airlines collected were just $2.5 billion and this grew to $36 billion in 2012. At the end of 2013, these fees are expected to represent 5% of all revenue collected by the airlines.
Ancillary fees consists of airlines selling miles, baggage fees, food/beverage and retail sales during the flights etc.
I disagree with the CEO of IATA about airlines creating value by collecting these extra fees. I would rather say that they try to keep the advertised price as low as possible and then hit the travelers with all kind of junk fees later.
For now, most of the elite status travelers are exempt from the checked bag and other fees that many of the airlines collect. This may change once the new IATA resolution of personalized airfares takes effect. Airlines may decide that it doesn’t make sense to offer the lowest fares to captive elite fliers that don’t pay many of these ancillary fees.
It is good that the airlines are finally making some profits, so that they can invest to more modern aircraft, but I disagree with the current love fest of ancillary fees that can make the travel rather unpleasant experience.