Rocket Science

Awhile back I posted a write up about a new “ancillary fee” at Southwest Airlines and included link to a story about the amount of money airlines were “making” from these fees.

I recently read a story the author had with an airline executive ranting about how the accountants are promoting the revenue from the “ancillary fees” for bag charges, on-board meals while at the same time hemorrhaging more and more money. The author draws a causal relationship between these fees and the losses (presumably due to lack of customers flying the airline). I’m not sure if I believe the causal relationship, but it’s an interesting read.

The faster airlines add fees for basic services like checked bags, the faster their total revenue declines. And as my airline-executive friend ranted a few weeks ago, it’s the forest that matters, not the trees or the fees.

Source: Brancatelli, J. (2009). The Forest, the Trees and the Bag Fees.
Retrieved October 9, 2009 from Joe Sent Me Web site http://joe.biztravelife.com/09/042309.html

(Here’s another related article at CNN.)