The Senate's Homeland Security Permanent Subcommittee on Investigations has come down hard on U.S. airlines, particularly targeting what they call "junk fees"—extra charges passengers encounter for what used to be included with their flights. This newly released report, timed just before the Thanksgiving holiday, spotlights major carriers like American Airlines, Delta Air Lines, and United Airlines, as well as budget airlines such as Frontier and Spirit Airlines, for squeezing additional dollars from travelers during peak travel times.
Chairman of the subcommittee, Senator Richard Blumenthal (D-Conn.) expressed strong sentiments about the findings, stating, "Our investigation has exposed new details about airlines exploiting passengers with sky high junk fees. This report pulls back the curtain on tactics like dynamic pricing and how they burden travelers and boost airline revenue." The timing of this report, coming just days before Thanksgiving—when millions are expected to travel—is particularly pointed.
The report highlights how airlines have collectively raked in approximately $12.4 billion from seat fees alone from 2018 to 2023. This revenue includes charges for seats with extra legroom and those located in preferred areas of the airplane. Specifically, for the first time, United Airlines made more from seat fees ($1.3 billion) than from checked bag fees across all of 2023.
Digging more deeply, the subcommittee's investigation revealed the use of complex algorithms by airlines to set and adjust prices, which can vary significantly from one passenger to another. Some airlines have resorted to employing additional incentives for gate agents to enforce baggage policies rigorously. According to the report, Spirit and Frontier Airlines allocated $26 million between 2022 and 2023 to gate agents, encouraging them to identify passengers who may not abide by baggage rules, often leading them to incur extra fees or even miss their flights altogether.
Ahead of the planned testimony from airline executives on December 4, Senator Blumenthal lamented, "With millions of holiday travelers still facing fees without any clear justification from airlines, we have little choice but to act." During this hearing, representatives from all five implicated airlines will be summoned to discuss their fee structures and the underlying practices contributing to these growing costs.
While some airlines are modifying their approaches—having eliminated ticket change fees for standard economy tickets—they're simultaneously introducing fees for passengers who opt for more desirable seating selections, such as those with more legroom. This shift has led to rising frustrations among flying consumers, especially during high-traffic seasons.
The issue of junk fees is not limited to airlines. The Biden administration has prioritized addressing excessive fees throughout various sectors, including hotels and ticketing industries. Advocates desire legislation mandinating clearer upfront disclosure of fees before purchase as part of broader consumer protection efforts. Recommendations from this Senate report suggest the Department of Transportation should begin collecting and publishing specific data on revenue generated from seat fees, similar to current practices for reported bag fees.
Despite the investigation's findings, Airlines for America—a trade group representing major U.S. carriers—defended the industry's pricing model. They contended, "Air travel has become more affordable," implying consumers still have choices and can tailor their purchases to fit their budgets. The organization's statement noted, "This report demonstrates a clear failure by the subcommittee to understand the value the highly competitive U.S. airline industry brings to customers and employees." They characterized the report as having been drawn up solely for conversation during the busy holiday travel period, discounting its broader relevance.
The upcoming testimony from airline executives will also be pivotal. Executives have consistently indicated their commitment to presenting competitive pricing and fare options, positioning themselves as responsive to pressures from both regulators and travelers alike. How they navigate the twin challenges of heightened scrutiny and increasing customer dissatisfaction remains to be seen, especially as many travelers are now advocating for transparency and fairness concerning travel pricing.
Spirit Airlines, known predominantly for its low-cost flight offerings, stated it has long maintained transparency about its pricing and operations, emphasizing compliance with all tax regulations. Frontier Airlines echoed similar sentiments, asserting their commissions for gate agents are simply intended to uphold bag policies and not as punitive measures against customers.
The subcommittee has ramped up scrutiny previously, having addressed concerns around the safety culture at Boeing and investigating whistleblower claims. This persistent examination of the airline industry's operational practices indicates not only concerns about consumer pricing but broader issues surrounding industry governance and accountability. With the subcommittee pushing forward, the outcome of the hearing on December 4 could signal important shifts for travelers and the airline industry alike as it continues to adapt to the regulatory environment and consumer demands, particularly during this year’s turbulent travel season.
