Reading financial statements can be a difficult task for the unititiated.
So many lines under profit and loss, under balance sheet and assets and liabilities.
It is easy for ones eyes to glaze over and not notice what pops up in the finer details.
Luckily there are those for whom numbers are a huge turn on. They see lines popping out at them like the brightest stars in the sky.
These bean counters as they are sometimes called find gems of knowledge that kick us in the head with the hard cold heel of reality.
The US Department of Transportation’s Bureau of Transportation Statistics (BTS) was wearing the boots this week as they pointed out a line most of us might just pass over.
It is a line in airline revenues called ancillary fees.
Since they keep statistics for all US airlines, they were able to report that carriers collected $7.8 billion in ancillary fee revenue in 2009, compared to $5.5 billion in 2008.
So what’s include in those amazingly high numbers.
They are part and parcel of the airlines ‘irritation charges’, those new so called menu items we theoretically could avoid if we didn’t take luggage, change bookings, or buy food or pillows on board an aircraft.
Note you pay an extra fee to use your free reward miles. You want a good seat ahead of time, pay the piper. It all adds up into major revenues for the airlines.
Spirit Airlines drew over 20% of its revenues from ancillary fees and the biggest collectors of the irritation fees were the big guys, American, Delta, and US Airways.
Since the airlines still seem to be having a hard time making money, perhaps we need to think of these purchases as a support charity package for them.
Let’s make that number grow. Let’s buy more blankets at ridiculous prices, let’s be thankful that the rewards we collected for loyalty are levied an extra price for that loyalty when we redeem them.
Let’s be thankful for the multi-million dollar bonuses the executives receive for their incompetence in running money losing airlines by irritating the hell out of passengers who would sooner stay home, take a train, or drive rather than putting up with air carrier gouging.
These numbers are enough to make an accountant vomit, while the consumer carries on blissfully aware of the cash grabber hiding between the lines.