The U.S. Senate is taking a surprise stand against airline fees.
The Forbid Airlines from Imposing Ridiculous Fees Act of 2016 (FAIR Fees Act), introduced this week, would prohibit air carriers from imposing fees that are “not reasonable and proportional” to the costs incurred by the air carriers. And the Senate version of the Federal Aviation Administration reathorization bill, also introduced this week, contains a provision that would commission a government study on how air carriers calculate some of their most profitable fees.
The proposed laws came as a surprise to industry observers, who are accustomed to a hands-off approach to regulating airlines. Taken together, the developments suggest that even in a Republican-controlled Congress, there’s a limit to what the airline industry can get away with.
Grounding “soaring” fees
Fees are a chronic source of complaints among constituents. Airlines have sought to inoculate themselves from regulation by waiving ticket change fees for members of Congress and with generous campaign donations. But now, even that appears to be insufficient to stop proposed regulation.
“This measure will ground the soaring, gouging fees that contribute to airlines’ record profits and passengers’ rising pain,” said Sen. Richard Blumenthal (D-Conn.), who co-sponsored the Fair Fees Act. “With all the frills of flying already gone, airlines are increasingly resorting to nickel and diming consumers with outrageous fees.”
Take checked baggage fees, for example. Between 2009 and 2014, three airlines increased checked baggage fees by 67 percent, a recent investigation by the minority staff of the U.S. Senate Commerce, Science and Transportation Committee found. It’s a jarring increase, when you compare the modest $464 million earned in 2007 to 2014’s astonishing $3.5 billion. In the past, airline executives have said fees like this can represent the difference between a profit and a loss.
Blumenthal also notes that four airlines increased domestic cancellation fees by 33 percent between 2009 and 2014, while one increased the fee by 50 percent, and one increased its fee by 66 percent, according to the Senate study. The numbers are dramatic here, too — cancellation fees skyrocketed from just $915 million in 2007 to $2.9 billion in 2014.
It’s difficult to argue that the airline’s cost to transport a checked bag or make a ticket change has increased by that much in just a few years, according to Blumenthal. He says these “runaway” fees can, in some cases, double a passenger’s airfare, and that people who are least able to afford them — non-elite level parents who are traveling with young children — are hardest-hit.
“A parent who wants to sit with his young child, a customer who wants to check or carry on a bag, or have Wi-Fi, or a traveler who needs to change or cancel a reservation should not incur exorbitant, unnecessary fees on the whim of an airline,” he adds.
An airline industry representative predicted that regulating fees would lead to higher fares.
“When the government last dictated airline pricing, many couldn’t fly because it was cost prohibitive,” warned Jean Medina, a spokeswoman for A4A, a trade association for airlines. “Customers have choices today. They can purchase non-refundable fares that are highly affordable. If they would like the flexibility to change their ticket at the last minute, they can do so as well.”