Delta ended free snacks on 9% of flights as U.S. airlines collected a record $7.3 billion in baggage fees in 2024. The fee escalation raises regulatory risk for AAL and UAL.
Delta Air Lines ended complimentary snacks and drinks for main cabin and comfort customers on flights of 350 miles or less on Tuesday, affecting roughly 9% of its daily departures. The move is a direct escalation of the industry's ancillary revenue strategy. It arrives as U.S. airlines collected a record $7.3 billion in baggage fees in 2024, according to Bureau of Transportation Statistics data. The U.S. Senate has also probed $12.4 billion in seat-fee revenue from 2018 to 2023 across major carriers including American Airlines and United Airlines.
For holders of AAL and UAL, the risk event is not the snack cut itself. It is the signal that airlines are testing the upper bounds of fee tolerance at the same time regulators are paying attention. The question is whether this momentum toward ever-higher ancillary charges triggers a legislative or regulatory response that caps fee growth or forces structural changes to pricing transparency.
Delta called the change consistency. What it represents is a redefinition of what counts as a baseline service. Until Tuesday, a drink and a snack were included on short flights for main cabin customers. Now those customers must buy onboard or bring their own. Delta's reasoning is that the change aligns with industry practice on longer flights. It also increases per-passenger revenue on roughly 9% of daily departures.
The Port Authority had already capped airport water prices at 15% above local street prices and required a $2 water bottle after a $27.85 beer at LaGuardia and $10.90 fries at Newark drew public backlash. Airlines are now applying similar logic to their own captive environments. The risk is that consumers, having been conditioned to pay for bags and seats, view the removal of the last free amenity as a breaking point.
A Senate report on seat fees found that American, Delta, United, Frontier, and Spirit generated $12.4 billion in seat-fee revenue from 2018 to 2023. In 2023, United charged as much as $319 for an extra legroom seat and Spirit charged as much as $899 for a Big Front Seat. Delta charged up to $264.99 for the same perk in 2024. Those numbers are large enough to attract legislative attention, especially as ancillary revenue becomes a larger share of total airline income.
The report has not yet led to regulation. It establishes a documentary baseline. If fee growth accelerates further, lawmakers may view the fee model as a consumer protection issue rather than a market dynamic.
The trajectory of baggage fees shows how quickly an add-on becomes a profit center. In 2017, legacy carriers charged about $25 each way for a domestic first bag. By 2018, American, Delta, and United moved the first bag to $30 and the second to $40. Today the per-bag charges look like this:
Industrywide baggage fee revenue rose from $3.8 billion in 2015 to a record $7.3 billion in 2024. The compounding rate is well above passenger growth. The average traveler pays more per trip for the same service.
Frontier's optional services list is a catalog of fees that individually seem small. Collectively they can exceed the base fare. Items include $15 for a seat, $3.50 for onboard snacks and drinks, and the carrier interface charge. The model demonstrates that when a carrier treats every service as unbundled, total customer cost becomes opaque. That opacity is precisely what regulators target in other industries – banking overdraft fees, hotel resort fees, and telecom billing add-ons.
If any component of Frontier's model attracts a rulemaking, the entire unbundling strategy across the sector faces a read-through.
The industry assumption has been that demand is inelastic for essential services like checked bags and seat selection. The data supports that view so far: revenue per passenger from ancillary sources continues to rise without measurable volume declines. The removal of free snacks and drinks on short flights may test a different elasticity – the willingness to tolerate a completely fee-permeated experience.
Portland International Airport is the outlier. Vendors there are required to charge the same prices at the airport as they do on the street in Portland. No airline has adopted a similar model. The contrast suggests that a regulatory cap on airline fees is not impossible. It would require political will and a consumer trigger.
AAL (American Airlines) carries an Alpha Score of 66/100, labeled Moderate. UAL (United Airlines) scores 65/100, also Moderate. Both sit in the Industrials sector. The fee escalation is a double-edged sword for these stocks. Higher ancillary revenue supports earnings per share in the near term. The regulatory overhang, if it materializes, could compress multiples and limit upside.
For traders, the key is whether fee growth can continue without intervention. The Memorial Day travel period will provide a real-time test of consumer tolerance. If booking data shows no pushback, the sector may continue to extract more revenue per passenger. If complaints spike or load factors dip on routes where fees are highest, the narrative shifts.
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The risk event is not the snack cut. It is the cumulative weight of $7.3 billion in baggage fees, $12.4 billion in seat fees, and a Senate report that has already documented the numbers. The next catalyst is any legislative or regulatory action that turns those numbers into a constraint.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.