Here’s the final piece of the ancillary revenue puzzle. It’s an amorphous category known as miscellaneous operating revenues, and although we may not know that much about it, we do know there’s a lot of it being collected by airlines. Like, almost $3 billion worth of it last year. And probably about the same amount in 2010.
I won’t bury the lead: Between miscellaneous fees, baggage fees and reservation change fees, the U.S. airline industry will probably collect an astounding $9 billion or so from us this year.
Nine. Billions. Dollars.
Wow.
So let’s take a closer look at this last piece, then.
First, what is a “miscellaneous fee”?
The Bureau of Transportation Statistics offers a few clues, saying the number includes items such as pet transportation and revenue from the sale of frequent flier award program miles. But there’s no requirement that airlines to report revenues from fees in specific accounts, so for our purposes, we have to look at all three numbers (miscellaneous fees, luggage fees and reservation change fees) to triangulate the full ancillary picture.
Let’s have a look at some of the industry leaders.
No surprise, here. Notice that bump after 9/11? That was the era of “no waivers/no favors” — and passengers didn’t like it. The entire industry backed off.
Et tu, Southwest? What was that dip in 2008? An accounting irregularity?
Nothing like a merger to help you find religion about ancillary fees.
Look, I have no problem with fees, as long as they are fully disclosed and add value to the experience. But many of these fees are not. They are simply a money grab, and a sneaky one at that.
I believe it’s possible that the airline industry could break the $10-billion mark for ancillary revenues this year.
We need to wake up, and realize that the base fare we’re being quoted is almost certainly not what we’ll pay for our flight. We need to start thinking differently about airfares.
Otherwise, these numbers will continue to rise.
