Airline ‘nickel and dime’ fees add up to 1400 percent profit increase since 2007

A new congressional report released Aug. 7 took aim at the airline industry for failing to adequately disclose extra fees and add-on costs to the tune of $38.1 billion, a 1,400 percent profit increase since 2007.

The report, released by the minority staff of the Senate Commerce Committee, found that ancillary fees, such as change and cancellation penalties and preferred seating, are increasingly keeping consumers in the dark about the true cost of air travel. It also made a number of recommendations requiring more transparency from the airline industry.

"The airline industry has got to do a better job of disclosing extra fees they charge to consumers," U.S. Sen. Bill Nelson (D-Fla.), the panel’s top Democrat, said in a written statement to the American Media Institute. “The public deserves to know the full cost of their air travel."

In the case of preferred seating charges, the report found that consumers who purchase tickets through airline websites are sometimes only presented seats that require an additional fee. In such instances, many travelers often pay the fee, unaware that the airlines will randomly assign them an available free seat at a later date.

American Airlines, one of the nation’s largest carriers, referred press inquiries to Airlines for America, the world’s largest airline trade association.

“It would be difficult to find an industry that is more transparent than airlines in their pricing," Spokesperson Melanie Hinton told the American Media Institute in an email statement. "The fact that a record number of people are traveling this summer further demonstrates that customers always know what they are buying before they purchase. Airfare remains a bargain, and costs considerably less and air service is far more plentiful than it was when the government last dictated pricing.”

Chris Mainz, a Southwest Airlines spokesman, also spoke with the American Media Institute via a written statement.

"We’re very proud of the fact that we are the only major U.S. airline that doesn’t charge for the first or second checked bag and that we don’t charge change fees," Mainz said. "While we are not fans of fees for services that historically have been part of the base fare, we believe strongly that the decision on whether or not to charge a fee for an airline product or service is a business decision best made by each individual airline. Southwest made the conscious decision to limit our customers' exposure to what we view as unreasonable and annoying fees. That was our choice. Other airlines have chosen a different business model and should have every right to do so."

Delta Air Lines did not immediately return emails from the American Media Institute for comment.

The congressional review also found that consumers generally did not receive prominent or clear flight change and cancellation fee disclosures when they purchased tickets from airline websites. In some instances, penalties for changing flight plans can double the cost of travel, even when the change is made far in advance of the flight.

The report’s recommendations included better and earlier disclosure of ancillary fees to help consumers compare costs among airlines; require checked baggage and carry-on baggage fees to have a clear connection between the costs incurred by the airline and the baggage fees charged; require airlines to promptly refund fees for any bags that are delayed more than six hours on a domestic flight; limit airline change fees to a reasonable amount tied to lead time prior to departure and an amount less than the original fare; mandate that airlines place clear disclosures that “preferred seat” charges are optional; require airline and travel agency websites to have a clear and conspicuous links to the Department of Transportation’s Aviation Consumer Protection website; and update the Department of Transportation’s Aviation Consumer Protection website to better assist the flying public.