In the final stretch of its four-year term in the White House, the Biden administration has taken multiple steps to crack down on various “junk fees” airlines try to quietly add to the main fare.
Last May, industry group Airlines for America and “big three” carriers United (UAL) , Delta (DAL) and American Airlines (AAL) came together to sue the Department of Transportation over a new rule requiring them to disclose additional charges upfront.
Three months later, the government agency came out with a new proposal that would also prohibit airlines for charging a passenger to sit next to a child under 13.
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A United Airlines aircraft is seen in flight. United was specifically called out in a U.S. Senate report on hidden fees.
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Airlines accused of ‘exploiting passengers with sky high junk fees’
In further investigation of hidden fees in the aviation industry, the U.S. Senate’s Homeland Security Permanent Subcommittee on Investigations released a Nov. 26 report titled “The Sky’s The Limit.”
It shows that five U.S. airlines — the “big three” along with Spirit Airlines (SAVE) and Frontier (FRON) — earned a total of $12.4 billion by charging for seats next to a fellow traveler, at the front of the aircraft or with extra legroom between 2018 and 2023.
This includes the $1.3 billion in seat fees that United Airlines (UAL) earned during the same time period — more than the $1.2 billion in checked bag fees for the first in the airline’s history — and $26 million that Spirit and Frontier collectively spent to have gate agents to catch “offenders” trying to sneak in an oversized bag.
The report further said the airlines use algorithms and in some cases artificial intelligence to set separate fees and market specific types of seats to travelers most algorithmically likely to pay for them.
“Our investigation has exposed new details about airlines exploiting passengers with sky high junk fees,” Chair Sen. Richard Blumentahl (D-Conn.) writes in a statement. “This report pulls back the curtain on tactics like dynamic pricing that burden travelers and boost airline revenue.”
The airline industry hits back yet again: ‘Clear failure’
The report is released ahead of a Dec. 4 panel in which chief executives of each of the five airlines investigated will answer senator questions about seating fees.
At the time of the report, Spirit released a statement saying it remains “transparent about our products and pricing,” while Frontier said gate agent commissions are “designed to incentivize our team members to ensure compliance with bag size requirements.”
Delta issued a statement saying it is looking forward to “dialogue” during the December panel.
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Industry association Airlines for America hit back with a statement saying that more upfront fee disclosure would “greatly confuse consumers” and “complicate the buying process.” The push-and-pull between airlines and those tasked with regulating them is expected by some in the industry to turn in favor of the former with the upcoming Trump administration.
“The report demonstrates a clear failure by the subcommittee to understand the value the highly competitive U.S. airline industry brings to customers and employees,” the lobbying group representing the airlines named in the report writes further. “Rather, the report serves as just another holiday travel talking point.”
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