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Why do airlines charge so much for checked baggage? This vague principle helps explain why

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Five out of six the biggest American airlines To have they’ve increased fees for checked baggage from January 2024

Take American Airlines. In 2023, it cost $30 to ascertain in for an ordinary bag on an airline; today, as of March 2024, it costs $40 at a US airport – a rise of as much as 33%.

How Business school travel professorI’m often asked why airlines discourage their customers by charging baggage fees as an alternative of mixing all fees. There are many reasonsbut a crucial, often ignored reason is hidden within the US tax code.

A loophole in tax law

Airlines pay the federal government 7.5% of the ticket price When flights of individuals inside the country, together with other fees. Airlines do not like these fees industry association arguing that they increase the price of a typical airline ticket for the patron by a couple of fifth.

However, the US Code of Federal Regulations specifically excludes luggage from the 7.5% transport tax, so long as “the fee is separate from the fee for transporting a person and is indicated in the exact amount.”

This signifies that if an airline charges a complete of $300 for a round-trip flight with you and your luggage inside the U.S., it owes $22.50 in taxes. If the airline charges $220 for airfare and likewise charges $40 each way for baggage, then the overall cost is similar, however the airline only owes the federal government $16.50 in taxes. Splitting baggage fees saves the airline $6.

Now $6 may not appear to be so much, but it could possibly add up. Last 12 months, passengers benefited over 800 million trips on major airlines. Even if just some of them check their bags, it means big savings for the industry.

How big? The government has tracked baggage fee revenue for a long time. In 2002, airlines charged passengers a complete of $180 million for checked bags, which worked out to about 33 cents per passenger.

These days, as any flyer can attest, baggage fees are much higher. Last 12 months, airlines collected greater than 40 times more in baggage fees than in 2002.

When full data for 2023 is accessible, total baggage fees will likely exceed $7 billion, or about $9 per average domestic passenger. By dividing the price of the baggageLast 12 months, airlines avoided about half a billion dollars in taxes.

In the twenty years since 2002, carriers have paid a complete of roughly $70 billion in baggage fees. This signifies that charging baggage fees individually saved airlines roughly $5 billion in taxes.

It seems clear to me that tax savings are a think about unbundling baggage fees resulting from a loophole within the law.

The US government doesn’t apply the 7.5% tax to international flights over 225 miles outside the country. Instead, they’re constant international taxes on departures and arrivals. That’s why major airlines charge $35 to $40 for bags for those who are flying domesticallybut don’t charge a baggage fee once you fly to Europe or Asia.

Do travelers get anything for their money?

This system raises an interesting query: Do bag fees force airlines to be more careful with bags when higher-paying customers expect higher service? To discover, I contacted the Bureau of Transportation Statistics, which is where this happened tracking lost luggage for a long time.

For a few years he calculated the variety of reports of mishandling of bags per thousand airline passengers. Government data showed that the very best level of mishandling of bags was in 2007, when there have been seven reports of lost or damaged luggage for every thousand passengers. This signifies that roughly once every 140 flights you possibly can expect your luggage to go on a distinct journey than the one you might be happening. By 2018, this estimate had dropped to at least one in every 350 flights.

In 2019, the federal government modified the way in which of tracking mishandling of bags, calculating the figures based on the overall variety of checked bags fairly than the overall variety of passengers. New data shows that around six bags per thousand checked are lost or damaged, representing lower than 1% of luggage checked. Unfortunately, the info doesn’t show any improvement since 2019.

Can something be done about higher baggage fees? Complaining about politicians probably won’t help. In 2010, two senators tried to ban baggage feesand their bill went nowhere.

Given that Congressional motion has failed, there’s a straightforward strategy to avoid higher baggage fees: travel without unnecessary luggage AND do not check any luggage. Not taking all of your stuff with you when traveling could seem difficult, nevertheless it could be the most suitable choice as baggage fees increase.

This article was originally published on : theconversation.com
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Business and Finance

New Orleans’ black business district is marked by history

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New Orleans, Black Business Disctrict


New Orleans has given a historic monument to a Black business district closed for interstate construction.

The marker was a project fulfilled by in response to the initiative of Plessy and Ferguson. Founded by descendants of men involved within the Plessy v. Ferguson case that legalized segregation within the United States, the organization worked with other community groups to put a marker under the Claiborne Viaduct.

Before the upheaval, Black New Orleanians could find stores owned by other members of their community on Claiborne Avenue. Racial discrimination originally limited the power to buy on the famous Canal Street. Given this, blacks as an alternative flocked to the realm to purchase every little thing from groceries to funeral arrangements.

This mall was home to many Black-owned businesses, and emerging and established entrepreneurs had arrange shop for generations. Consisting of pharmacies, theaters, studios and more, it helped maintain a vibrant black culture in the realm. It reigned because the most important street of Black New Orleans from the 1830s to the Seventies.

The street once featured a picturesque cover of oak trees surrounding bustling businesses. However, its decline began with the expansion of roads within the southern state. The first casualty was the oak trees that were cut all the way down to make way for the development of Interstate 10, and shortly thereafter, the district’s thriving entrepreneurs suffered an identical fate.

Many residents do not forget that they didn’t know in regards to the upcoming investment until the trees began falling. Raynard Sanders, a historian and executive director of the Claiborne Avenue History Project, remembered the “devastation” felt by the community.

“It was devastation for those of us who were here,” Sanders told the news outlet. “I was walking to school and they were cutting down oak trees. We had no warning.”

Despite its eventual decline, the district stays an integral a part of Black New Orleans entrepreneurship. Now the town will physically resemble a historic center where Black business owners could thrive. They celebrated the revealing of the statue in true New Orleans style with a second line that danced down Claiborne Avenue.

“The significance of this sign is to commemorate the businesses, beautiful trees and beautiful people that thrived in this area before the bridge was built, and to save the people who still stand proud and gather under the bridge,” also said Keith Plessy, a descendant of Homer Plessy’ ego.

The growth of local black businesses continues. Patrons and owners alike hope to evoke the spirit of Claiborne’s original entrepreneurs, empowering the community.


This article was originally published on : www.blackenterprise.com
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Business and Finance

Flau’jae Johnson joins an unrivaled basketball league with NIL deal

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Flau


Louisiana State University women’s basketball player Flau’jae Johnson recently announced that she is an ambassador for the upcoming women’s skilled basketball league, Unrivaled.

After signing a NIL (name, image and likeness) agreement with the emerging sports league, Johnson is the second college athlete to sign with Unrivaled. In August, the league signed Paige Bueckers, who plays for the University of Connecticut (UConn). Johnson joins former teammate Angel Reese, who signed with the league earlier this 12 months. The college junior posted about joining the league on her social media platform.

“The future is second to none. I’m excited to join the Unrivaled team as an NIL Ambassador 👑💜4️⃣.”

Johnson’s deal with NIL features a stake in Unrivaled, providing potentially greater financial success beyond her athletic prowess.

She talked to her concerning the deal means for her and her future.

“I think the most important thing is equity, just being able to invest in something like this,” Johnson said. “And for me, the opportunity to leverage my brand and create business opportunities. This is what the NIL space is all about. When you’re at NIL, you literally have a short window where everyone wants you to be a part of (something), so really leverage it into something that’s going to last for a long time. This will be in my business portfolio and allow me to raise capital in the future, it’s a really big deal.”

Unrivaled is a brand new women’s basketball league founded by Minnesota Lynx forward Napheesa Collier and New York Freedom forward Breanna Stewart last 12 months in July. The league is scheduled to begin on January 17, 2025. It is a 3-on-3 format that already pays players higher salaries than the WNBA. The ladies founded the league to permit players to earn money within the off-season by playing basketball without having to travel abroad to accomplish that.

“In leagues like this, women don’t have to go overseas anymore,” Johnson said. “Now they may stay home, play in Miami where the sky is gorgeous and collect their paycheck. I feel it is very vital what they do – they really change the sport. Being someone who can be within the WNBA soon and having an alternative choice is big.


This article was originally published on : www.blackenterprise.com
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Business and Finance

Black business leaders return to New York for ReSURGEnce 2024

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Business leaders, clergy, government officials and aspiring entrepreneurs gathered in New York City last month for a “big slice of the economic pie” at ReSURGEnce 2024, a transformative event designed to shine a highlight on black business in America and all over the world. world.

Over the course of three days, participants were equipped with resources to grow to be successful entrepreneurs of their communities and immersed themselves in conversations focused on closing the Black wealth gap and growing Black businesses. The November ReSURGEnce conference featured panels, keynotes and breakout sessions led by black business pioneers from New York to Africa, according to a press release.

“The reSURGEnce conference will equip attendees with the tools they need to participate in a rapidly changing economy,” said the Rev. Dennis Dillon, lead organizer of the ReSURGEnce conference. The event was designed to provide emerging entrepreneurs with networking opportunities and methods to access funding to scale their businesses, do business with government agencies and corporations, construct wealth through real estate and homeownership, and more. Additionally, guests were educated on how to run a business within the renewable energy and green economy sectors.

Dillon, the book’s publisher, said that as recent technological advancements emerge and the world evolves right into a recent wave of economic globalization, the Black community continues to be left behind. Ahead of the conference, The New York Christian Times published its “2024 State of the Black World Economic Report,” which revealed how far behind Black Americans remain in every area of ​​the economy compared to their white counterparts. A report written by Dillon found that although blacks make up over 19% of New York’s population, only 9% constitute the purchasing power within the state. Dillon hopes conference attendees will use the resources and education to grow their businesses and further educate their communities in order that Black people all over the world can “reap the benefits of economic globalization just like their counterparts do.”

ReSURGEnce 2024 also celebrated the Black Church and discussed strategies to empower communities all over the world. The official website of the initiative states that the event is a chance for leaders and entrepreneurs discuss ways to strengthen the economic health of the Black communitycreate jobs and permanently close the racial wealth gap.

This yr’s conference, which featured the Durban Global Roundtable and Investment Forum, returned to Queens, New York from November 22-24.


This article was originally published on : www.blackenterprise.com
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