Transcript:
Conway Gittens: I’m Conway Gittens reporting from the New York Stock Exchange. Here’s what we’re watching on TheStreet today.
Airline executives are headed to Capitol Hill to defend extra seat fees, algorithm pricing, and other complaints made in a Senate report. Leaders from American, Delta, United, Frontier, and Spirit have been called to testify before the Senate Permanent Subcommittee on Investigations in December.
Related: This is how much airlines made by charging you to sit together
The report criticizes these airlines for what it deemed as unnecessary ticketing fees that raked in an extra $12.4 billion between 2018 and 2023. The extra fees are for things like preferred seating, seats with more legroom, and certain window or aisle seats.
In a statement, Richard Blumenthal, head of the Senate subcommittee said “Our investigation has exposed new details about airlines exploiting passengers with sky high junk fees,” adding “we regret that travelers will be charged millions of dollars in fees that have no basis in cost to the airlines but simply fatten their bottom lines.”
The report highlights United Airlines for taking in $1.3 billion in seating fees in 2023, making it the first time since 2018 that revenue from that fee topped checked-baggage fees.
A lobbying group for the industry said the report proves that some lawmakers have a “clear failure” in understanding the airline business.
The airline industry has become quite proficient in coming up with new ways to raise revenue beyond the actual ticket price. From 2018 to 2023, American, Delta, United, Frontier, and Spirit took in an additional $25 billion in baggage fees alone.
That’ll do it for your Daily Briefing. From the New York Stock Exchange, I’m Conway Gittens with TheStreet.
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