Airlines make billions in seat fees, and lawmakers aren’t happy

On By Littum

A US Senate panel on Tuesday criticized increasing airline fees for seat assignments and baggage and will call airline executives to testify on December 4.

Senator Richard Blumenthal, who chairs the Permanent Subcommittee on Investigationswill convene a hearing titled “The Sky’s the Limit – New Revelations About Airline Fees” with senior executives from American Airlines, United Airlines Delta Air Lines, Spirit Airlines and Frontier to testify.

Blumenthal’s report revealed that the five airlines combined earned $12.4 billion in revenue from seat fees between 2018 and 2023, and said last year that United earned $1.3 billion in seat fees for the first time — more than the $1.2 billion , they profited from checked baggage fees, the report said. .

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Blumenthal’s panel spent a year investigating, finding that carriers increasingly use algorithms to set fees, target prices based on customer information and said some carriers may be avoiding federal transportation taxes by labeling some charges as non-taxable charges .

His committee found that ultra-low-cost carriers Frontier and Spirit paid $26 million to gate agents and others between 2022 and 2023 to catch passengers who allegedly don’t pay baggage fees or have oversized items.

Border agents can earn as much as $10 for each bag a passenger is forced to check at the gate, the report said.

Frontier said: “The gate agent commission is simply designed to encourage our team members to ensure compliance with bag size requirements so that all customers are treated equally and fairly.” Spirit and United did not comment.

Airlines for America, a trade group, said the optional fees that customers can choose, plus average domestic return prices, including fees, were 14% lower in 2023 in real terms than in 2010.

Delta said it is committed to “providing a selection of fares that best meet our customers’ specific travel needs.”

Blumenthal said Congress should require airlines to provide more detailed fee information. He said the USDOT should investigate potential abuses in incentive-based fee collection.

Airlines sued to block the Transportation Department’s new rule on advance disclosure of airline fees, while in 2018 airline CEOs successfully lobbied against bipartisan legislation to mandate “reasonable and proportionate” baggage and change fees.

-David Shepardson for Reuters.