Skift Take

It will be interesting to watch pro-airline interest groups roll out their rationale against reforming the onerous fees charged by air carriers for routine services. Meanwhile, consumers will flock to the cheapest tickets possible.

While the U.S. Senate readies a bill to reauthorize the Federal Aviation Administration, another group of legislators has introduced legislation that would limit the add-on fees that airlines can charge for services like checking baggage and changing tickets.

The Forbidding Airlines from Imposing Ridiculous (FAIR) Fees Act would prevent air carriers from charging “that are unreasonable or disproportional to the costs incurred by the air carrier,” according to the bill’s text.

In other words, fees would provide for the cost of the air carrier’s operations instead of acting as a profit center that takes advantage of passengers. The Secretary of Transportation would have the power to regulate and set the prices of these fees, making them proportional to the cost of providing the services.

“Airlines fees are as high as the planes passengers are traveling on, and it’s time to stop their rapid ascent,” said Senator Edward J. Markey, a Democrat from Massachusetts and a member of the Senate Commerce, Science and Transportation Committee. “In recent years, fees and ticket prices have gone up despite the fact that gas prices and airline choices have gone down. Airlines should not be allowed to overcharge captive passengers just because they need to change their flight or have to check a couple of bags. There is no justification for charging consumers a $200 fee to resell a $150 ticket that was cancelled well in advance. The FAIR Fees Act puts a stop to this fee gouging and will help ensure passengers are flying the fair and friendly skies.”

Airlines charged more than $5 billion in bag and change fees in the first three quarters of 2015, according to Senator Markey’s office.

According to the FAIR Act, baggage fees would be pegged to the cost actually incurred to the airlines for providing the service of checking a bag, including labor and ticketing.

A similar restriction would be placed on cancellation fees; the new fees will be set according to the costs of changing the flights, as opposed to an expensive set price that airlines use to generate revenue today.

The bill will garner strong support from consumer and business travel groups, but probably faces a tough road to being passed.

“Airlines are overcharging consumers with fees that are grossly disproportionate to the value of the service received and result in a windfall for airlines. ‘Exhibit A’ is change fees, where airlines charge $200 when the true cost of a change is 6 to 7 times lower, if not zero,” said Business Travel Coalition founder Kevin Mitchell. “This kind of unconscionable consumer price gouging is a textbook example of unfair methods of competition that underpin competition laws.”


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Tags: fees

Photo credit: Passengers see belongings, airlines see revenue, and some politicians see things to regulate. Skift

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