Description: Really – no really – apparently there was a time when airline travel was fun. One of the things that has taken some of the fun out of flying is the growing bevy of fees. Fees for Luggage. Fees for a cold beverage. More fees to pick your seat. All these fees keep creeping into our wallets. Now Southwest Airlines, a long-time no frills flight provider, has fuelled speculation it may be searching for extra fees after its CEO said revenue was “under construction.” Baggage fees alone generate billions in revenue for US airlines.
Date: February 08 , 2019
1) Have you ever wondered where all these extra fees come from? What do you think has prompted a strategy for airlines to lower their base fares and crank up the extra fees?
2) If you were an accountant advising Southwest Airlines on what extra fees it might charge, what type of data would you perhaps provide?
3) Take a look at the vignette about Westjet on page 463 of Wiley’s Financial Accounting: Tools for Business Decision-Making. See if you can find an extra fee Westjet created to generate additional revenue.