Airlines are always on the hunt to add to their ever-growing list of fees for passengers.
Airlines are always on the hunt to add to their ever-growing list of fees for passengers.
Want enough room for your legs so that your knees aren’t in our chest during your flight?
Such a premium seat will cost you extra.
Like to check a bag?
That’s an extra fee on most airlines.
So how long will it be before airlines start charging for the extra body weight you carry aboard?
Not too long. Just consider a new study by an economist encouraging airlines to charge a fat flier fee.
Bharat Bhatta, an associate professor in Sogn og Fjordane University College in Norway, makes the case for charging overweight passengers in his study, “Pay-As-You-Weigh Pricing of an Air Ticket: Economics and Major Issues for Discussions and Investigations.” Bhatta argues that heavier passengers should pay more to travel. The study was published in the Journal of Revenue and Pricing Management.
“If we ponder for a moment, charging passengers for their air travel according to their body weight seems to be intuitive, logical and consistent with simple mathematics and economics,” Bhatta writes. “The purpose of the charging policy is not to finger [point] at heavier people. Under the PAYW model too, heavier people may avoid the extra [fee] if the excess weight is really owing to medical reasons and unavoidable.”
Bhatta concluded that it takes more fuel to transport heavier people and obese fliers produce more wear and tear on airline seats, therefore they should be charged more than a skinnier passenger, reports NBC News contributor, A. Pawlowski.
Bhatta believes his pay-as-you-weigh model “rewards passengers who weigh less than average and/or when they reduce weight, providing financial savings and improved health benefits.”
Bhatta came up with some possible scenarios for charging based on a passenger’s size, as outlined by NBC:
• Carriers could set a fixed rate per pound so that a person weighing 130 pounds would pay half the airfare of a 260-pound person.
• There might be a fixed "base fare" for average weight passengers, with airlines either charging an extra fee for heavier fliers or offering a refund to skinnier ones.
• Create a fare tier based on whether passengers are at, below, or above average weight.
Samoa Air, the national carrier of Samoa, has already started charging passengers by weight, NBC News reported.
As the NBC report noted, more than one-third of U.S. adults are obese. “Fliers spilling out of their seats have frustrated many travelers, so most airlines now have policies in place that address ‘customers of size.’ Many ask passengers who can’t sit with the arm rests down to purchase an additional seat,”
“Sooner or later I think airlines will adopt this type of pricing,” Bhatta told NBC News.
But Bhatta admits that imposing an extra fee for overweight fliers could be “potentially contentious because it may be viewed as discriminatory against heavier people.”
I have to ask. This week’s Color of Money Question: What’s your opinion about the pay-as-you weigh model? Send your responses to firstname.lastname@example.org. Be sure to include your full name, city and state. Put “Fat Flier Fee” in the subject line.
Chat Live With Me Today
Join me today at noon ET for my live online discussion.
My guest will be Emily Bennington. Her book, “The Girls’ Guide to Corporate Domination: Who Says It’s A Man’s World” is this month’s Color of Money Book Club pick.
If you can’t join me live, send your questions in early or read the archives later.
Music legend Dionne Warwick is deep in debt.
The 72-year-old chart-topping singer and aunt of the late Whitney Houston has filed for Chapter 7 bankruptcy protection claiming she only has $1,000 in cash and $10.7 million in debts, reports the New York Daily News. Most of Warwick’s debt is $10.2 million in long overdue taxes owed to the IRS and California.
In her bankruptcy filing, Warwick says her average monthly income is $20,950 but her typical monthly expenses come to $20,940.
Warwick says she spends $5,000 per month on housekeeping and $4,000 per month on a personal assistant, according to TMZ.com.
Warwick says she has just $25,500 in assets, which includes two furs and two pairs of diamond earrings.
The five-time Grammy award winner has sold 100 million records.
In a statement, Warwick’s publicist Kevin Sasaki said “several consecutive years of negligent and gross financial mismanagement,” contributed to the singer’s financial dilemma, the Daily News reported.
This isn’t the first time Warwick has filed for bankruptcy. She filed for Chapter 11 protection in 1993, according to the Daily News.
You would think with all the money she earned from hits such as “I Say a Little Prayer” and “Do You Know the Way to San Jose,” she could afford a good financial adviser.
As I always say: How do you go broke on $200 million? You spend $201 million.
I thought of Warwick and others as I listened to and read news reports about the latest Powerball jackpot winner. A New Jersey man won the $338 million pot, opting to take a lump-sum payment worth $221 million, or about $152 million after taxes, according to the Associated Press.
Wonder if the man will use his newfound wealth wisely?
Take for example, Sharon Tirabassi who in 2004 won more than $10.5 million in Canada’s Lotto Super Seven. Today, she is broke and working a part-time job, reports the Hamilton Spectator.
Tirabassi and her husband went through half the money by 2007 splurging on big-ticket items. Now, the money is gone, and they are living in a rented house raising six kids.
So what did they waste the money on? Here’s what, according to the Canadian paper:
• Four vehicles: a Hummer, a Mustang, a Dodge Charger and a $200,000 Cadillac Escalade. By the way, the Cadillac’s in storage. It needs repairs the couple can’t afford.
• They gave $1 million to her parents and $1.75 million was divided among her four siblings.
• All-expenses paid trips to Cancun, Florida, Las Vegas, California and the Caribbean for her friends.
• A home purchased for $515,000. They took out a $360,000 mortgage on the house.
Again, as I always say, if you aren’t managing the money you have now, it’s not likely you’ll do better with more.
2013 Tax Season
If you haven’t filed your tax return for 2009, you might want to get busy. You could be owed a refund.
As I reported on Wednesday, the 984,400 taxpayers who did not file a federal income tax return for 2009 could be giving up a little more than $917 million, the IRS estimates.
The IRS estimates that half the potential refunds for 2009 are for more than $500.
Or maybe you haven’t filed because you know you owe taxes you can’t afford to pay. You are gambling that the IRS won’t catch up to you. It’s not a good strategy because if it does, the penalties are pretty hefty.
And please don’t fall for the ads from companies claiming they can get the IRS to take pennies on the dollar. You will pony up money you don’t have to do -- in most cases -- what you can do for yourself.
Here are two links you’ll find on www.irs.gov offering payment options:
• Offers In Compromise. This allows you to settle yourtax liabilities for less than the full amount owed. It’s what those companies advertising are generally referring to when they claim they can get your tax debt reduced. You can submit your own offer.
• Installment Agreement. You can make monthly payments through an installment agreement if you're not financially able to pay your tax debt immediately.
In last week’s newsletter, I told you about a report that found that delaying marriage can increase the economic fortunes of educated women.
But the biggest downside to delayed marriage in America is that many young adults are now “putting the baby carriage before marriage,” according to “Knot Yet: The Benefits and Costs of Delayed Marriage in America,” which was sponsored by the National Marriage Project at the University of Virginia, the National Campaign to Prevent Teen and Unplanned Pregnancy, and the Relate Institute.
So for last week’s Color of Money Question, I asked: “What do you think of the findings in ‘Knot Yet’ study?”
Here are comments on the subject from Washington Post.com readers.
“Today women are responsible -- extremely so -- and cautious. They are earning more degrees, earning income, and waiting to find a match to build a stable family with (for those who so dream for a family),” online reader bravobravo wrote. “Yet, if no commitment from a man is present, then they will build the family on their own. Many women know of the difficulties about having children on [their] own, or the challenges to the child, and don't need any lectures about the difficulties.”
Another reader, Hila, added: “The best thing we can do for the health of the earth and the future of human civilization is to delay having kids. The best result is that people who delay have fewer kids. There are way too many people on earth.”
You are welcome to e-mail comments and questions to email@example.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.
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Tia Lewis contributed to this report.