Airline Industry | featured news

American Airlines CEO Tom Horton wants to set the record straight: It was he who approached US Airways CEO Doug Parker about the possibility of combining the two airlines, not the other way around.

A $10 priority-boarding fee here, a $25 checked-bag fee there; pretty soon, you’re talking real money. $22.6 billion, in fact. According to the annual Amadeus Review of Ancillary Revenue Results released Monday, that’s how much ancillary revenue 50 airlines around the world reported making in 2011, a 66-percent jump from the $13.5 billion that the 47 airlines that reported such income made in 2009.

When the airline industry took a nose dive a decade ago, executives at global carriers scrambled to find a quick fix to avoid financial ruin. What they came up with, according to federal prosecutors, was a massive price-fixing scheme among airlines that artificially inflated passenger and cargo fuel surcharges between 2000 and 2006 to make up for lost profits.

Also lagging the market Wednesday are airlines shares, down on the day by about 1.2% as a group, led down by Pacer International ( PACR - news - people ) , trading lower by about 5.1% and Pinnacle Airlines ( PNCL - news - people ), trading lower by about 4.9%.

Back in the mid-1980s, Boeing and Airbus avoided a trade war by making a gentlemen’s agreement not to seek government financing to sell planes in each other’s home markets. The deal symbolized an aviation world dominated by the United States and Europe.

As airlines add planes and flights, some worry the industry could drift back toward the problem that brought bankruptcies and massive losses earlier this decade: too many seats.

Airlines make billions of dollars in fees for check-on luggage, refreshments and other services formerly included in ticket prices, but consumers have a hard time figuring out how much they'll pay in total to fly, a congressional committee heard Wednesday.

US Airways Group Inc said on Thursday it had dropped out of merger discussions with United Airlines parent UAL Corp, immediately raising the stakes for similar talks involving United and Continental Airlines Inc.

One thousand British Airways staff have offered to work as cabin crew if strikes at the airline go ahead.

The industry is beginning to show signs of a recovery, with modest increases in revenue and forecasts of growing demand this year. After more than a year of slumping demand and sinking revenue, the nation's airline industry is beginning to show signs of a recovery, with modest increases in revenue and forecasts of growing demand this year.