Airlines face Capitol Hill over additional pricing tactics

The chief executives of five major U.S. airlines will be questioned on Wednesday on Capitol Hill about onerous additional fees that often cost passengers more than the base price of a plane ticket.

A Senate subcommittee will hear testimony from executives at American Airlines, Delta Air Lines, United Airlines, Frontier Airlines and Spirit Airlines about increases in ancillary fees customers pay — costs that have now gone far beyond checked baggage to other “extras” such as choosing a seat or, on limited tickets, bringing a large carry-on bag on board.

The hearing followed an acrimony report released last month by the Senate Permanent Subcommittee on Investigations, which criticized the billions of dollars in additional fee revenue that airlines have collected in recent years, “obscuring the total cost of travel” and make it more difficult, the report argues, for customers to comparison shop.

“Our investigation has revealed new details about the airlines,” Sen. Richard Blumenthal, a Democrat from Connecticut and chairman of the subcommittee, said in a Nov. 26 statement. taking advantage of passengers with exorbitantly high trash fees.” “I will ask the airlines to justify these practices.”

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A trade group for the largest U.S. carriers said it was “deeply disappointed” by a report that showed a misunderstanding of the airline industry.

“Today, America’s airlines are offering more options and better service while ticket prices, including ancillary revenue, are at historic lows,” Airlines for America said in a statement. Dad with TPG this week.

As part of a year-long investigation, lawmakers found American Airlines, Delta Air Lines, United Airlines, Frontier Airlines and Spirit Airlines generated $12.4 billion in booking fee revenue from 2018 to 2023. That’s more than the $25 billion in baggage fee revenue reported by those carriers to the U.S. Department of Transportation during that same time frame.

The report scrutinized Frontier and Spirit, the nation’s largest ultra-low-cost airlines, for incentive-based programs that they alleged paid gate agents millions of dollars in commissions when passengers Baggage payment or other ancillary expenses at the airport.

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It also calls on Congress to require airlines to provide clearer data on how much extra revenue they collect from “extra” fees; Today, airlines report total checked bag fees to the government but do not face similar disclosure requirements for the growing amount of other non-ticket revenue they collect.

Airlines first added checked bag fees in the late 2000s amid rising fuel prices and the subsequent Great Recession. Since then, checked baggage fees have increased steadily and the additional costs for passengers have spread to other aspects of air travel amid the growth of low-cost airlines and the introduction of low-cost airlines. Basic no-frills economy tickets at the biggest airlines.

More recently, 2024 saw most major US airlines increase baggage fees within a few weeks – a tight timeframe that also prompted the November report to disagree, in line with historical patterns It’s common to see the largest airlines piggyback on competitors to increase bag fees.

For its part, Airlines for America argues that the airlines’ broader range of services and optional fees cater to the growing number of flyers that today allow nearly 90% of Americans to board a flight. trade at some point in their lives.

“That’s because Americans have the choice to pay for the services they want and forgo the services they don’t want,” the organization said.

Wednesday’s hearing before the Senate subcommittee is scheduled for 10 a.m. in Washington, DC. It is unclear what, if any, action will result from the hearing or the recently completed investigation, as the 118th Congress ends later this month and the Biden Administration leaves office in January.

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