U.S. Airlines Rake in Billions from Bag and Seat Fees

Ancillary revenue continues to be essential for airline profitability, with legacy and low-cost carriers charging extra for baggage and seat selection.

Mar. 22, 2026 at 10:25am

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Airlines were expected to make a record $157 billion in ancillary revenue in 2025, according to industry consultancy IdeaWorksCompany. The firm's analysis found that United Airlines earned $1.3 billion in seat fees and $1.2 billion in checked bags in 2023, while other major U.S. carriers like American and Delta also generated significant revenue from these fees. Baggage fees remain the top single source of airline ancillary revenue, but seat selection fees are also contributing significantly to airlines' bottom lines as they get more creative in merchandising their cabins.

Why it matters

While many passengers dislike these so-called 'junk fees,' the revenue they generate is essential for airlines to maintain profitability and continue providing air service, especially in the wake of shocks like the COVID-19 pandemic. Airlines have historically operated on narrow margins, making them vulnerable to sudden disruptions, and the fees help build 'shock-absorbing resilience' into their businesses.

The details

According to IdeaWorks, Frontier Airlines earned the most per passenger from baggage fees at $25.88, followed by Allegiant at $22.16 and Spirit at $17.53. On the seat selection side, Frontier earned $7.93 per passenger, Spirit earned $7.88, and United earned $7.76. Airlines have also significantly increased the premium charged for extra legroom, with Frontier and Spirit raising their prices by over 40% compared to 2019.

  • In 2023, United Airlines earned $1.3 billion in seat fees and $1.2 billion in checked bags.
  • In 2024, Delta Air Lines reported $1.06 billion in baggage revenue, American Airlines reported $1.5 billion, and United reported $1.35 billion.
  • In 2018, American, Delta, and United all raised their first checked-bag fees to $30, which barely covered the airlines' costs of handling bags. In 2024, Delta raised its fees to $35, while American and United raised theirs to $40.

The players

United Airlines

A major U.S. airline that earned $1.3 billion in seat fees and $1.2 billion in checked bags in 2023.

American Airlines

A major U.S. airline that reported $1.5 billion in baggage revenue in 2024.

Delta Air Lines

A major U.S. airline that reported $1.06 billion in baggage revenue in 2024.

Frontier Airlines

A U.S. low-cost carrier that earned the most per passenger from baggage fees at $25.88.

Spirit Airlines

A U.S. low-cost carrier that earned $7.88 per passenger from seat selection fees.

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What they’re saying

“Ancillary revenue continues to be essential to airline profitability.”

— Jay Sorensen, President of IdeaWorksCompany

“When airlines focus on well-designed baggage policies, effective seat merchandising, and clear customer communication, they can achieve both strong revenue results and greater passenger choice.”

— Jay Sorensen, President of IdeaWorksCompany

“Airlines have successfully built shock-absorbing resilience into their businesses that is delivering stable profitability.”

— Willie Walsh, IATA Director General

The takeaway

While passengers may dislike the growing number of airline fees, these 'junk fees' are essential for airlines to maintain profitability and continue providing air service, especially in the face of external shocks. By focusing on transparent and well-designed fee structures, airlines can balance strong revenue generation with greater passenger choice.