Airline fees make it hard to shop for best deal
WASHINGTON (AP) – Finding the best deal on a flight has become a lot more difficult, thanks to hefty baggage and service fees that consumers often don’t know about until they show up at the airline counter, congressional investigators say.
Those fees are not part of the ticket price, meaning they can easily go unseen until it’s too late for the consumer to shop around. The fees, amounting to billions of dollars for the airlines, also go untaxed, and some lawmakers want to reclaim that money for the treasury.
Airlines, travel agents, online travel services and other ticket distribution channels should be required to disclose fees for checked baggage, changed reservations and other services in a clear and consistent manner, the Government Accountability Office said in a report out Wednesday.
The office is Congress’ financial watchdog and its report preceded a congressional hearing into the matter Wednesday.
Since 2007, many airlines have been charging for services that were traditionally included in the price of a ticket. That’s improved airline bottom lines in a tough economy but raised the ire of travelers who find themselves nickeled and dimed to substantially higher costs.
Besides checked bags, some airlines charge fees for seat selection, extra leg room, prime spots in boarding lines, blankets, pillows, drinks and meals. “Those fees can be an unexpected shock totaling hundreds of dollars,” said Charles Leocha, director of the Consumer Travel Alliance.
In the last budget year, 10 U.S. airlines collected $7.8 billion in such fees, congressional accountants say. The leader was Delta Air Lines, the world’s largest airline, with $1.6 billion.
Airlines say fees benefit passengers because they allow airlines to keep ticket prices down and consumers pay only for services they use.
“This is a deregulated industry and this is an industry that should be able to charge whatever it opts to charge for services,” said David Castelveter, a spokesman for the Air Transport Association, which represents major airlines.
“There is no reason why one passenger should subsidize another for a service he or she doesn’t consume,” Castelveter said. He said airlines already disclose the fees consumers are most concerned about, like checked bag fees, on their websites.
American, Continental, Delta, US Airways and United all charge $25 for the first checked bag, and $35 for the second, according to the booking website Kayak. JetBlue charges $10 and up for additional legroom. AirTran charges $6 for passengers to get seat assignments in advance, and sells exit row seats for $20 extra. Snacks at most airlines run $2 to $5, meals a bit more.
The Transportation Department is considering requiring airlines to disclose two ticket prices to passengers: a “full fare” with all mandatory charges like taxes, and “full fare-plus” with the extras.
The government charges a 7.5 percent excise tax on airline tickets to pay for the air traffic system. The IRS ruled last year that optional fees aren’t subject to the excise tax.
The report says the government could have raised $186 million last year if the checked bag fees alone had been taxed, an amount likely to grow as airlines charge more fees.