VC10er
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"United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 3:17 pm

I just read this on line in a New York Daily News (a newspaper I wouldn't ever touch) which picked up the piece from ideaworkscompany.com.

United leads the global pack which includes AA, Southwest, Delta, Qantas and even TAM, all of which top the list, but United is far ahead at $5.2 Billion. (I don't know if E+ counts)

Airlines say they impose these fees or offer more for more to offset the price of fuel. What the article doesn't say is IF this $5.2 billion did cover rising fuel costs? Or did plus even added to gross earnings for last year.

Also, I learned that airlines do not pay taxes on these revenues. So if you pay $25 for an extra bag checked, 100% of that goes direct into the airlines purse.

My first question is: did these fees cover the rising cost of fuel? Or are they a genus way to lump additional fortune on top of already good earnings at UA? And will they be rolled back one day? Or will they charge us $5 more if we can see the engine from our window and keep going?
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STT757
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 3:23 pm

Quoting VC10er (Thread starter):
And will they be rolled back one day?

At this point not unless pro-consumer politicians like Senator Schumer can get something passed. Without some sort of regulation businesses will always push the envelopes as to what they can get out of consumers.

Back in the day I remember flying PeoplExpress and thinking how tacky it was they charged for check luggage, and their fee was only $3.00!.........
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DeltaMD90
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 4:22 pm

There is finally some stability and profit in the US airline industry (mostly) across the board. I'm glad it's like that, hopefully, it will stay around this level
Ironically I have never flown a Delta MD-90 :)
 
SonomaFlyer
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 4:55 pm

As long as they identify how much these fees are for various services, Washington isn't going to be able to change what is occurring in the industry. Remember folks, we brought this upon ourselves with a total focus on the least cost no matter what. AA tried to give more leg room in coach and keep fees a tad higher for it and that idea bombed. Airlines which have tried a more all business class approach also bombed. Attempts to differentiate with a higher cost product have almost universally failed (i.e. better food/more choices, more meal services on shorter flights etc).

The airline industry is what we the consumer demanded; a seat on a plane from point a to point b. Any notion that you should get anything else other than that is absurd.

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cruiseshipcrew
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 7:51 pm

I'm all for checked luggage fees and I'm glad to see they are playing a large role in bringing the airline's finances back!
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LV
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 7:59 pm

So I guess that makes the bag tossers the most profitable employees in the company
 
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rotating14
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 8:18 pm

What did airlines do before they implemented fees to cover everything. Granted the price of fuel with inflation over time has contributed to higher fuel costs but to make $5.2 billion for charging seems lime a lot, and I love flying United.
 
LoneStarMike
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 8:27 pm

Quoting VC10er (Thread starter):
Also, I learned that airlines do not pay taxes on these revenues

That's the part I don't like. If a company earns revenue, it should be taxed, whether it's revenue from fares, or revenue from fees.

If I have a job and earn a salary, then I have to pay income tax based on my salary. Wouldn't it be nice if I told my employer to fire me, and then re-hire me as a "consultant?" Then I could just charge my employer a "consultancy fee" and never pay income tax again.

If UA had to pay taxes on that 5.2 billion in fees they collected, that would have amounted to an additional 390 million in taxes.

Of course there will be those who say - "But the airlines would just pass those taxes on to the customer." I'm fine with that.

When the airlines started charging all these fees, they likened it to someone going to a restaurant and ordering items off an ala carte menu. Well, guess what? When you go to a restaurant and order two items off the menu, you pay taxes on those two items. If you order five items off the menu, you pay taxes on those five items. (At least that's how it works in my state.) Why should restaurant customers be treated any differently from airline customers?

And for the record, I'm not just picking on UA here. I think it should apply to every airline.

LoneStarMike
 
VC10er
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 9:33 pm

I am very happy when corporations make a lot of money, and today with pressure for CSR (corp social responsibility) companies who do make a lot of money are giving back to our communities. Aside from the wonderful and tasteful way UA helped the grieving from the Colorado massicare. One way UA can burnish their image is to take a X millions of the $5.2 billion and help our troops, schools, kids etc.

But these surcharges clearly unearthed an amazing revenue stream like, my last short flight from EWR to RIC (under 500 miles) United gave me the mileage booster option of $45 for + 1500 miles. I did it for the first time. It felt like a deal. But really did how much of my $45 was spent to defray extra fuel costs for my E145, 50 minute flight, and how much did it add to United's impressive numbers.

It also says: for all the UA complaints for over a year, that United had so, so many millions of fliers that just a fraction of these folks there was actually a huge amount of pax willing to pay extra for something like priority boarding! People must not dislike United as one would think by reading A.net. United was almost double with 5.2 than #2 Delta. Why? Does UA offer more options? Do they charge more for the extra thing? It's 25 hubs all over the world or sheer size? Or, is their actually a UA preference?

Quoting STT757 (Reply 1):

I didn't go to the link, I just read the news article. It sort of implies that their are 2 different mainstream fliers: the "I don't care about anything other than price" and have no expectations of good service or leg room, And another group who will seek a fair price but want non-stops and some bells and are willing to pay for E+ and others. If I was flying economy to London (for example) wouldnt think twice to pay my way up to E+.
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BlatantEcho
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 9:55 pm

I think threads like this show a stunning lack of basic business sense or basic understanding of corporate taxation.

In short:
- A la carte pricing like this is a lot more fair to 'consumers' as it lets them buy what they want and no more.

- Of course a company pays taxes on its profits. What the airlines do not have to do is charge FAA taxes, airport taxes, security taxes, accessibility taxes, emission taxes, on top of baggage fees.

Airlines will pay plenty of taxes on whatever their taxable income is, no matter what the source...



These are some very basic concepts about how life works guys, it's scary what passes as facts on the Internet sometimes...
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flybyguy
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 10:18 pm

Quoting BlatantEcho (Reply 9):
In short:
- A la carte pricing like this is a lot more fair to 'consumers' as it lets them buy what they want and no more.

Is that really the case? Will we come to a point when the base airfares return to the late 90's rates with ala carte pricing? I thought the whole idea behind ala carte pricing was to make it harder for the consumer to compare the total cost of air travel between airlines. Internet travel sites like Kayak, Priceline, and Expedia have made it pretty hard for airlines to keep base fares high when the consumer can find the lowest fare carrier on any route in seconds.
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tx2fl
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 10:34 pm

Quoting cruiseshipcrew (Reply 4):
Quoting cruiseshipcrew (Reply 4):
The airline industry is what we the consumer demanded; a seat on a plane from point a to point b. Any notion that you should get anything else other than that is absurd.

THIS!! ^^^^^^ Can I get an AMEN! What else can you get in 2012 for the same price that you paid in 1992 give or take 25.00. I remember my parents paying over 500.00 R/T to get me to Puerto Rico from Texas for a school trip. It's still less than 500.00 from Texas. When I hear the general public complaining I want to ask them what they do for a living. If they are with a business that sells a product or service, I'd like to ask them for the 1992 price. Especially the ones in Real Estate or Car Sales.
 
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sat Jul 28, 2012 11:11 pm

Quoting BlatantEcho (Reply 9):

All I want to say is the article I read in a NY paper simply said that airlines do not pay taxes on these surcharges/fees and that surprised me. Then again it's the Daily News and not a respected rag. But they did site the source as a company that specializes in the airline sector. Your points are illuminating but we're not included in the article. I am an admitted aviation enthusiast, but no expert by any means. The points you mention wouldn't have dawned on me. So thank you.

I am a senior executive in a design firm (LANDOR) a division of a 70,000 person, very global company and there is NO charge paid by a client that goes untaxed if it is revenue, it's taxed. What loopholes our CFO and tax attorneys have around the world is thankfully not my job.
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windy95
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 12:18 am

Quoting VC10er (Thread starter):
Or are they a genus way to lump additional fortune on top of already good earnings at UA?



This money is not lumped on top of already good earning. Without it they would of had billion's in losses

Quoting VC10er (Thread starter):
My first question is: did these fees cover the rising cost of fuel?



Yes. They made a profit of $1.3B in 2011. But without the billions that they "raked" in from these fee's they would of had a large loss.

Quoting VC10er (Reply 8):
One way UA can burnish their image is to take a X millions of the $5.2 billion and help our troops, schools, kids etc.



No they can pay their employees and shareholders.

Quoting VC10er (Reply 8):
United gave me the mileage booster option of $45 for + 1500 miles. I did it for the first time. It felt like a deal. But really did how much of my $45 was spent to defray extra fuel costs for my E145, 50 minute flight, and how much did it add to United's impressive numbers.



United payed $2.8B more on fuel in 2011 than the previous year. So yes a large chunk went to pay for extra fuel cost's

Quoting flybyguy (Reply 10):
I thought the whole idea behind ala carte pricing was to make it harder for the consumer to compare the total cost of air travel between airlines.



No it was to get what you pay for. Have to large heavy bags and you are going to pay more. Pretty simple.

Quoting rotating14 (Reply 6):
What did airlines do before they implemented fees to cover everything.

Have huge losses...

Quoting rotating14 (Reply 6):
but to make $5.2 billion for charging seems lime a lot,

They did not make $5.2B it just added to their total operating revenue of some $37B. The made $1.3B out of that total revenue. So no it is not a lot.
 
simairlinenet
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 1:19 am

Quoting VC10er (Thread starter):
Also, I learned that airlines do not pay taxes on these revenues. So if you pay $25 for an extra bag checked, 100% of that goes direct into the airlines purse.

To be clear--the airline is paying tax on this revenue. U.S. airlines can currently claim to be double-taxed on their fares. If a ticket costs $100 to the customer, then some of this is going to the government taxes/fees, and then the airline is being taxed with corporate income tax.

Airlines are still paying taxes on these revenues on the end, just not the upfront tax.
 
AeroWesty
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 1:58 am

Quoting VC10er (Thread starter):
Or are they a genus way to lump additional fortune on top of already good earnings at UA? And will they be rolled back one day?

One of the things that came out in the Q&A during the earnings conference call was that some of what used to be accounted for as passenger revenue is now shown as ancillary revenue, pushing that piece of the pie higher. Items such as First Class upgrades, a growing piece of UA's revenue, could be a part of that number.
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spacecadet
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 2:07 am

Quoting rotating14 (Reply 6):
What did airlines do before they implemented fees to cover everything.

They charged higher fares.

I guess I don't have a problem morally with a-la-carte pricing if it means I end up paying the same amount as I used to anyway. What I have a problem with is the hassle of it, and the lack of truth in advertising. Why can't I specify up front that I want the full package, including checked bags, a meal, a movie, whatever else they want to charge for, and just pay once and be done? Why do I need to be constantly whipping out my credit card? And why can't I know in advance how much a trip is *really* going to cost me?

So fine - some passengers just want to get from point A to point B with *no* frills, so let them do that. I want everything. Let me pay for everything. Tell me what it's going to cost me and let me pay it. Why is that difficult? I *want* to pay all these "fees". I just want to do it once and have it be overwith. And I want to be able to compare the total cost of my flight - including the fees - with other airlines without having to maintain an Excel spreadsheet. I suspect this is the *real* reason for the fees, so airlines can advertise lower fares than most people will actually pay, without being able to directly compare against other airlines. *That's* deceptive.

Quoting simairlinenet (Reply 14):
If a ticket costs $100 to the customer, then some of this is going to the government taxes/fees, and then the airline is being taxed with corporate income tax.

I would be very curious to know how much corporate tax UA pays. Many corporations pay zero. (I should know, I own one of them.)

It's certainly not the case that any corporation is ever directly "double taxed". If a corporation can't find enough deductions to basically wipe out their overall corporate tax on earnings, then they need a better accountant.
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LoneStarMike
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 2:44 am

Obviously people have different opinions on this issue.

Here's another (older) article which asks the question:

Should Airline Fees Be Taxed?

I think the 4th guy who responded made a good point

Quote:
The federal airline ticket tax (and segment fee) is the principal source of funding for the Aviation Trust Fund. That fund was created by Congress to pay for the costs of the U.S. air traffic control (ATC) system and to provide funding for the federal Airport Improvement Program (AIP), which provides grants for airport capital improvement projects. ATC is the primary user of these monies.

The ticket tax is a percentage of the ticket price, however defined. Even before the ancillary-charge controversy, this so-called user-tax bore little relationship to use of either airport or ATC infrastructure. In terms of the ATC system, a large airliner like a Boeing 777 uses the identical ATC services as a small regional jet. Yet the ticket tax revenue generated by a 777 flight is many times that of the RJ.

The issue of ancillary charges makes this bizarre user tax even more ridiculous. Consider only a single type of airliner, say the Airbus A320, used by high-fare legacy carriers and low-cost carriers, alike. If United charges a bundled $300 fare that includes carry-on bags, a minimal snack, pillows and blankets, etc., it will pay $22.50 per passenger via the 7.5% ticket tax. But if Spirit charges $150 for a flight of the same length but includes $70 in ancillary fees, Spirit will pay just $11.25 per passenger. But Spirit will receive exactly the same ATC services for that flight.

LoneStarMike
 
slcdeltarumd11
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 3:10 am

That almost seems too high doesnt it? regardless of the exact number.............
Lets remember this the next time people try to say most people are elites and no one pays bag fees 

[Edited 2012-07-28 20:11:40]
 
etoile
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 3:14 am

Quoting spacecadet (Reply 17):
I would be very curious to know how much corporate tax UA pays.

Not a lot and not for the forseeable future. They have a $10B NOL carryforward. http://www.sec.gov/Archives/edgar/da...000119312512073010/d260625d10k.htm
 
runzel
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 4:09 am

The discussion the original post has generated is interesting, shows a cross-section of views on this segment of airline pricing. But has the actual figure of billions $5.2 been verified? It seems inordinately high. Conversely it indicates indisputably the high number of UA pax prepared to request and pay for 'exttras'. If the figure has already been verified and exists herein, please forgive my inability to find it.
 
N505fx
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 5:14 am

Quoting STT757 (Reply 1):
At this point not unless pro-consumer politicians like Senator Schumer can get something passed. Without some sort of regulation businesses will always push the envelopes as to what they can get out of consumers.

Try this one on for size, how about not taxing airlines 2X what tobacco gets taxed, and then maybe companies will stop using the tools necessary to make a profit!
 
etoile
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 5:17 am

Quoting runzel (Reply 21):
The discussion the original post has generated is interesting, shows a cross-section of views on this segment of airline pricing. But has the actual figure of billions $5.2 been verified? It seems inordinately high. Conversely it indicates indisputably the high number of UA pax prepared to request and pay for 'exttras'. If the figure has already been verified and exists herein, please forgive my inability to find it.

The study doesn't specifically state its source data. But it says the ancillary revenue is $36 per passenger, which seems plausible. http://www.ideaworkscompany.com/wp-c...se-70-Ancillary-Revenue-Top-10.pdf

Quoting spacecadet (Reply 17):
What I have a problem with is the hassle of it, and the lack of truth in advertising.

The airlines tell you they are going to charge ancillary fees. Assume you are an average passenger and just add $36 to each UA quote you get.
 
spink
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 5:37 am

Quoting N505FX (Reply 22):
Try this one on for size, how about not taxing airlines 2X what tobacco gets taxed, and then maybe companies will stop using the tools necessary to make a profit!

Probably a better solution is to move from a ticket tax to a per flight hour fee. As has been previously pointed out, the ticket tax fee currently impact higher fares more than lower fares and doesn't take into account non-ticket fees. With the current system, two identical planes flying the same route, requiring the same ATC/airport resources can pay a significant difference in fees, upwards of multiple the per plane fee.

So why not just move to a direct usage based fee on a per plane per hour rate.
 
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RWA380
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 1:05 pm

Quoting VC10er (Thread starter):

Also, I learned that airlines do not pay taxes on these revenues. So if you pay $25 for an extra bag checked, 100% of that goes direct into the airlines purse

Nope, sorry, income earned is money charged for a good or service, and must be reported by the airlines as revenue to the IRS, It would be a criminal offense to hide assets or positive cash flow from the government.
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aztrainer
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 2:14 pm

Quoting RWA380 (Reply 24):
Quoting VC10er (Thread starter):

Also, I learned that airlines do not pay taxes on these revenues. So if you pay $25 for an extra bag checked, 100% of that goes direct into the airlines purse

Nope, sorry, income earned is money charged for a good or service, and must be reported by the airlines as revenue to the IRS, It would be a criminal offense to hide assets or positive cash flow from the government.

VC, I read the same thing, but the person buying the ticket is not paying taxes as these are fee's. If they rolled the fee's into the price of the ticket then it would be taxed.
 
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 3:12 pm

Quoting runzel (Reply 20):

Ok, I finally figured out how to get this from my Blackberry. Never had to do that before.
Below is the link I read and it has the email address I included when I started this, that the NYDN* used as their source.
I hope it works. It says United at $5.2 B, leads the entire pack by a huge margin with Delta as distant #2

http://m.nydailynews.com/1.1123390

Oddly, I am very happy for United. I just hope their financial success will fund innovation and better product.

*remimder, IMHO, the NY Daily News is a horrible newspaper, it's an Archie Bunker kind of news provider. But this story was picked up "probably" to stir anger against airlines- IMO
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glbltrvlr
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 11:01 pm

Quoting VC10er (Reply 8):
United gave me the mileage booster option of $45 for + 1500 miles. I did it for the first time. It felt like a deal.

That's what United hopes for as it boosts their revenue by 10% or more by leg. But you paid .03/mile for miles that most sources value at .01/mile. United likes it because it helps their cash flow (cash up front for the promise of a benefit later that may or may not be claimed). If you were just a bit short of what was need for a specific award, it's not a bad deal, but not a great deal. As a means of boosting your account balance in general, it probably isn't a good deal. Especially as I don't think it counts for level status.
 
rcair1
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Sun Jul 29, 2012 11:40 pm

Quoting spacecadet (Reply 16):
So fine - some passengers just want to get from point A to point B with *no* frills, so let them do that. I want everything. Let me pay for everything. Tell me what it's going to cost me and let me pay it. Why is that difficult? I *want* to pay all these "fees". I just want to do it once and have it be overwith.

I think this is what we have. Sometimes I do the no frills, sometimes, "some" frills.
It is really that hard? I find that if you are on the airlines website - no. If you book through some 'low cost travel site' it is harder.

I like Frontier's model:
- Economy - no frills
- Classic - some frills
- Classic Plus - all the frills.

Not really that complex. It is very clear when you book.
rcair1
 
VC10er
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Mon Jul 30, 2012 12:35 pm

Quoting glbltrvlr (Reply 27):

Agreed, I know the house always wins! But for all the mile boosters I've seen this seemed reasonable vs the booster deals offered on a long haul where the miles you can get for $600 just never felt like a deal. I never did the math before but thanks for the metric. I'm sure UA tested the threshold like how much people are willing to pay for x amount of miles. Their clincher for UA is charging a fortune for miles that count towards status (EQM) for those with 90,000 and buying their way up to 1K.
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gigneil
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Mon Jul 30, 2012 6:18 pm

Quoting LoneStarMike (Reply 7):
That's the part I don't like. If a company earns revenue, it should be taxed, whether it's revenue from fares, or revenue from fees.

Airlines are already the most taxed industry in America, with practically no limits on what the government can do to them.

They pay nearly 40% of each ticket to the government in taxes. FORTY PERCENT

I'm quite obviously a tree hugging liberal, but the airline industry is treated like a piggy bank by this government. Its no wonder they can't make money.

NS
 
Rdh3e
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Mon Jul 30, 2012 7:50 pm

Quoting spacecadet (Reply 16):
I would be very curious to know how much corporate tax UA pays. Many corporations pay zero. (I should know, I own one of them.)
Quoting etoile (Reply 19):
Not a lot and not for the forseeable future. They have a $10B NOL carryforward. http://www.sec.gov/Archives/edgar/da...k.htm

Second quarter UA paid $1M in income taxes according to their earnings release.
 
gigneil
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Mon Jul 30, 2012 7:58 pm

Income taxes vs other forms of taxation are very different for corporations.

NS
 
OB1504
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Tue Jul 31, 2012 3:29 am

Quoting flybyguy (Reply 10):
Is that really the case? Will we come to a point when the base airfares return to the late 90's rates with ala carte pricing? I thought the whole idea behind ala carte pricing was to make it harder for the consumer to compare the total cost of air travel between airlines. Internet travel sites like Kayak, Priceline, and Expedia have made it pretty hard for airlines to keep base fares high when the consumer can find the lowest fare carrier on any route in seconds.

Airfares won't return to the late '90s rates because of inflation.

Quoting etoile (Reply 22):
The airlines tell you they are going to charge ancillary fees. Assume you are an average passenger and just add $36 to each UA quote you get.

   Not only that, but there are now regulations in place that require airlines to disclose to potential customers that additional optional service fees may apply.

Quoting aztrainer (Reply 25):
VC, I read the same thing, but the person buying the ticket is not paying taxes as these are fee's. If they rolled the fee's into the price of the ticket then it would be taxed.

As has been mentioned several times before, the tax that airlines don't pay on ancillary fees is the 7.5% federal excise tax. They still report the income and pay taxes on that at the end of the year.

Now, if there are tax loopholes that allow the airlines to pay significantly less income tax than they should, that's the IRS's problem, not that of the airline.

Quoting rcair1 (Reply 28):
I think this is what we have. Sometimes I do the no frills, sometimes, "some" frills.
It is really that hard? I find that if you are on the airlines website - no. If you book through some 'low cost travel site' it is harder.

I like Frontier's model:
- Economy - no frills
- Classic - some frills
- Classic Plus - all the frills.

Not really that complex. It is very clear when you book.

I love that Frontier offers a-la-carte and all-inclusive fares, and I wish other airlines would follow this example.
 
etoile
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Tue Jul 31, 2012 4:15 am

Quoting gigneil (Reply 30):
Airlines are already the most taxed industry in America, with practically no limits on what the government can do to them.

They pay nearly 40% of each ticket to the government in taxes. FORTY PERCENT

I'm quite obviously a tree hugging liberal, but the airline industry is treated like a piggy bank by this government. Its no wonder they can't make money.

The airlines also use a lot of government services and benefits: airports, ATC, TSA, counterterrorism services, the occassional fighter escort, guaranteed revenue, aerospace, materials and other scientific research.

Quoting RDH3E (Reply 31):
Second quarter UA paid $1M in income taxes according to their earnings release.

To be sure, $0 of that was U.S. federal income tax. See fn (D) in the release. United would have to perform like SQ in the 2000s, for the entire decade, before it starts paying federal income tax.
 
gigneil
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Tue Jul 31, 2012 8:49 pm

Quoting etoile (Reply 34):
The airlines also use a lot of government services and benefits: airports, ATC, TSA, counterterrorism services, the occassional fighter escort, guaranteed revenue, aerospace, materials and other scientific research.

Almost all of those are ADDITIONAL taxes.

NS
 
N505fx
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Tue Jul 31, 2012 9:27 pm

The airlines also use a lot of government services and benefits: airports, ATC, TSA, counterterrorism services, the occassional fighter escort, guaranteed revenue, aerospace, materials and other scientific research.

All supposedly paid for in our sales and income taxes. The burden on the healthcare system by "sins" is much higher than than the burden placed on transportation infrastructure, yet the taxes for "sins" is much lower than taxes on doing commerce - it makes no sense, and until it does, I am 100% ok with airlines exploiting the convoluted taxation system in this country.
 
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exFWAOONW
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Wed Aug 01, 2012 12:26 am

Quoting windy95 (Reply 13):
No they can pay their employees and shareholders.

And the retirees.
Is just me, or is flying not as much fun anymore?
 
etoile
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Wed Aug 01, 2012 2:40 am

Quoting gigneil (Reply 35):
Almost all of those are ADDITIONAL taxes.

Where are you getting your 40% from? I can't find anything in here http://www.sec.gov/Archives/edgar/da...000119312512073010/d260625d10k.htm that adds up close to 40% of $19 billion (or even $14 billion if you assume the $5 billion in ancillary fees is correct and they aren't taxed).

Quoting N505FX (Reply 36):

All supposedly paid for in our sales and income taxes. The burden on the healthcare system by "sins" is much higher than than the burden placed on transportation infrastructure, yet the taxes for "sins" is much lower than taxes on doing commerce - it makes no sense, and until it does, I am 100% ok with airlines exploiting the convoluted taxation system in this country.

My point was that it does sense for the airlines and their passengers to pay for their use of government services, and they seem to do so better than other industries and consumers. I agree that people should pay for the externalies they cause, but that is politically impossible for the most part.
 
strfyr51
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Wed Aug 01, 2012 6:32 pm

Quoting VC10er (Thread starter):

After the airlines abandoned the FULL fare mantra for the seemingly "Low Cost Carrier" route (which was he biggest marketing SCAM in recent memory) they also took EVERY opportunity to gat a full fare price to offset rising fuel costs. and it looks like it's working!! Fares are sheaper now than 20 years ago Mile for Mile, BUT! What you previously got for Free as part of your ticket price you NOW have to pay for. Through the NOSE !! No more free bumps to honeymooning couples, No more Free champagne for Anybody!! no more premium meals by Charlie Trotter or Wolfgang Puck. In short?? You're getting nickled and Dimed to Death. Were I starting an airline today I'd go back to full fare full service take it or Leave it! Let the "Southwest Crowd" fly Southwest. Run an International Service Airline on every flight Domestic or International Once the passengers Get to know what GOOD is? They'll fly you no matter What! And Pay the couple of Bucks Extra to DO so !!
 
windy95
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Wed Aug 01, 2012 8:38 pm

Quoting etoile (Reply 38):
Where are you getting your 40% from? I can't find anything in here

I believe he is talking total taxes and fee's for the airline and the customer together equals about 40% of the airfare. When you toss in landing fee's, ticket tax, segment fee's, facilities fee's and other's. There are around nine fee's and taxes on International flight's that equal about 25% of the cost of the ticket. Toss in the fuel tax and taxes on profits along with other fee's and taxes associated with employees like unemployment insurance and the Airlines are the most heavily taxed of all industries. They are the Golden Goose for many of these large cities and are being milked to death. Toss in idiotic new taxes like the Carbon tax and the industry is surely under assault.

Here is a good study by MIT that just covers ticket taxes. http://web.mit.edu/airlines/industry...v-2004/Taxes&Fees-Karlsson.pdf
 
etoile
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Thu Aug 02, 2012 3:40 am

Quoting windy95 (Reply 40):

I believe he is talking total taxes and fee's for the airline and the customer together equals about 40% of the airfare.

I'm not following. In Reply 35 Gigneil refers to all of the ancillary fees and charges (your "landing fee's, ticket tax, segment fee's, facilities fee's and other's" as "ADDITIONAL taxes." I'm wondering, if those are additional taxes, what's the 40% tax being referred to in Reply 30. The MIT study says the effective tax rate is 15.5% (which is also below average among the countries studied), which is a lot less than 40%.
 
windy95
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Thu Aug 02, 2012 2:16 pm

Quoting etoile (Reply 41):
I'm not following. In Reply 35 Gigneil refers to all of the ancillary fees and charges (your "landing fee's, ticket tax, segment fee's, facilities fee's and other's" as "ADDITIONAL taxes."

Cannot speak for him but the total tax rate which is including total taxes that the airline and the customer both pay for a flight almost 40% of your ticket price is taxes and fees charged by the governement to both you and the airline.

Quoting etoile (Reply 41):
what's the 40% tax being referred to in Reply 30.

We are not talking about the tax rate on profits for the airline but the total of all taxes and fees in the price of your ticket that yu and the airline are paying to the government.

Quoting etoile (Reply 41):
The MIT study says the effective tax rate is 15.5% (which is also below average among the countries studied), which is a lot less than 40%

That is the portion being charged directly to the customer for purchasing the ticket. The rest are from the direct taxation of the airline through propety taxes, fuel taxes and other such fees that corporation's pay which are passed on to the price of the ticket.
 
saab2000
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Thu Aug 02, 2012 2:21 pm

Quoting DeltaMD90 (Reply 2):
There is finally some stability and profit in the US airline industry (mostly) across the board. I'm glad it's like that, hopefully, it will stay around this level

This. I don't know why some folks like to sit like vultures and talk about the next airline to die but then complain that they're charging too much when they start to make a profit. Profitable airlines are a good thing for everyone involved, even customers.
smrtrthnu
 
strfyr51
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Thu Aug 02, 2012 2:56 pm

Quoting N505FX (Reply 36):

I think United charges and Pays the State, local and federal taxes on EVEY ticket ,every gallon of jet fuel or gasoline it buys airport landing fees per 1000lbs of weight ATC and fees to the FAA for administering the certificate, registation fees per airplane Airworthinesss certificates I don't think you have a grasp onthe ENTIRE fee and tax structure of an airline. Nothing is Free!!
 
etoile
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Fri Aug 03, 2012 5:51 am

Quoting windy95 (Reply 42):
That is the portion being charged directly to the customer for purchasing the ticket. The rest are from the direct taxation of the airline through propety taxes, fuel taxes and other such fees that corporation's pay which are passed on to the price of the ticket.

Fuel tax is less than a nickel a gallon and how much property does an airline own that is subject to property tax. I can't get to 40%, even including the fees/taxes that are just pass-throughs.
 
Rdh3e
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RE: "United Raked In 5.2 Billion In Fees Last Year"

Fri Aug 03, 2012 2:49 pm

Quoting etoile (Reply 45):
Fuel tax is less than a nickel a gallon and how much property does an airline own that is subject to property tax. I can't get to 40%, even including the fees/taxes that are just pass-throughs.

It's .2444. FET (federal excise tax) is 4.44/4.43 cents. Then there is a "refundable" 20 cents. But don't forget the underground storage tank fees and the environmental fees and the spillage fees. It all adds up, so saying "it's less than a nickel" is really only true for the federal portion. Not for the whole fuel bill.

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