A Senate committee in the U.S. is gearing up to scrutinize airline executives for their increasing reliance on fees for services that were once included in ticket prices, such as priority boarding and premium seating options. The committee’s chairman, Senator Richard Blumenthal from Connecticut, has expressed a belief that the federal government should investigate these so-called “junk fees” and possibly hold the airlines accountable for them, citing concerns that they unnecessarily inflate costs for travelers.
Blumenthal argues that fees for selecting seats are a lucrative revenue stream for airlines, as they do not involve additional costs associated with creating new seating options or other operational expenses. Despite the additional charges, demand for air travel remains robust, with the Transportation Security Administration reporting a record of nearly 3.1 million screened travelers at airports nationally within a single day. Notably, 2023 has also seen the 15 highest-volume days in TSA history, marking a 5% rise in passenger traffic at security checkpoints compared to the previous year.
Airline executives defend the imposition of these additional fees, rejecting the label of “junk fees” and suggesting they are simply responding to consumer preferences by offering choices. Andrew Nocella, the Chief Commercial Officer of United Airlines, stated in prepared remarks for the committee’s hearing that travelers seeking budget-friendly options can select lower-priced fares and forgo extra services. However, he acknowledged that there are customers willing to pay incremental charges for premium amenities, such as extra legroom or checked baggage.
Nocella concurred with those who argue that any fees should be clearly disclosed during the purchasing process to avoid surprising passengers. Last year alone, U.S. airlines generated over $7 billion from checked bag fees, with leading contributions from American and United Airlines. Additionally, they collected approximately $1 billion in fees for ticket changes and cancellations, which represents a sharp decline compared to pre-pandemic figures due to waiving change fees during the COVID-19 crisis.
Specific figures for various ancillary fees can be challenging to ascertain; however, a Senate subcommittee report indicated that major airlines, including United, American, Delta, Frontier, and Spirit, gathered more than $12 billion in seat fees from 2018 to 2023. These fees typically pertain to services like select seating with added legroom or preferred aisle positions.
The committee was set to hear testimony from executives such as Nocella, along with leaders from American, Delta, Frontier, and Spirit airlines regarding these issues. Airline fees have become a recurring theme of criticism by the current administration, reaching the attention of President Biden himself.
A new regulation from the Transportation Department, which took effect in October, mandates that airlines provide automatic cash refunds for tickets and associated fees in the event of flight cancellations. The airline industry is currently in litigation to challenge another rule that seeks to enforce clearer disclosure regarding baggage and cancellation fees. An appeals court has temporarily halted this regulation, leaving its future uncertain, particularly with a potential change of leadership in the White House.
Disputes between the airline sector and Transportation Secretary Pete Buttigieg over policies surrounding fees and regulations are expected to continue, regardless of the outcome of the upcoming elections.