As of today: US security fees will increase air fares, lower airline stocks

SecFee
SecFee
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Written by Linda Hohnholz

It has been a very profitable year for airline shareholders. The stocks of legacy carriers such as American, Delta and United Continental have risen at least three times higher than the S&P 500.

It has been a very profitable year for airline shareholders. The stocks of legacy carriers such as American, Delta and United Continental have risen at least three times higher than the S&P 500. Shares of low-cost carriers such as Southwest and Spirit have gained almost 50 percent since January.

As of today higher fees will be tacked on to US airfares that have been climbing. But airline shareholders should be wary; the higher fees could bring turbulence to whatโ€™s otherwise been a smooth flight.

The airline business is tough. Weather delays, volatile jet-fuel prices and impatient passengers all wanting a bargain can play havoc with an airlineโ€™s carefully crafted business model. And in the new week, the federal government will slap on higher security fees.

Airlines wonโ€™t necessarily see higher profits. The Transportation Security Administrationโ€™s security fee goes up from $2.50 per leg of a one-way trip to a flat $5.60. And if you have a layover of more than four hours, youโ€™ll pay another $5.60 even though you havenโ€™t unpacked. We are talking dollars and cents for fliers, but it adds up to millions of dollars in additional fees that the industry must collect.

About the author

Avatar of Linda Hohnholz

Linda Hohnholz

Editor in chief for eTurboNews based in the eTN HQ.

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