As airline revenue from extra fees increases, so does consumer ire

Bernadine Fong was accused of being a no-show

Airlines sure do love their fees, don’t they?

A recent U.S. Government Accountability Office (GAO) report revealed that domestic air carriers collected $7.1 billion in revenue from checked-bag and changed-reservations fees last year. The extra charges are helping the industry earn record profits.

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Passengers like Margo Schneider, a communications consultant from Delray Beach, Fla., are frustrated by being baited by a low fare online, only to find out later — sometimes much later — that they have to pay a $25 fee to check a bag.

“I consider a checked bag to be a part of my ticket purchase,” says Schneider. “I don’t know anyone who doesn’t fly without luggage.”

Airline customers are angry and getting angrier about these fee games. Two recent studies shine a spotlight on the reasons, which basically amount to a collective feeling of being duped by fare quotes that don’t include the additional fees most travelers must pay to fly. A solution that would allow air travelers to search and compare fares is a long way off, despite regulatory efforts.

The GAO report concluded that, on average, passengers who flew with at least one checked bag paid more in total for their airfare and bag fees than they did when fares included checked baggage. Research conducted in 2015 by Charles River Associates for the Travel Technology Association, a trade group, suggests that when airlines are less than forthcoming about the full price of a ticket, the ticket cost increases by $30. Airlines say they’re just giving customers a choice by “unbundling” their services. But, to some passengers, the act of quoting a low fare and then charging additional fees feels like a bait-and-switch.

A new study by UserTesting, a technology company, even names names. It found that all airlines received mediocre to low scores when it came to online bookings. Unsurprisingly, Southwest Airlines, a carrier known for its passenger-friendly policies, scored highest; Spirit Airlines, which isn’t, scored lowest. The research noted that “hidden information” made travelers distrustful of Spirit.

The most frustrating aspect of the booking process according to the study? As you might expect, it’s figuring out how much the final cost of your ticket will be. On nine of the 10 websites, customers rated that the most difficult task.

Behind the scenes, another drama is unfolding. Airlines not only obfuscate their prices on their own sites. They also refuse to share their fee information with third parties who could repurpose the information to offer apples-to-apples comparisons. Online travel agencies are understandably unhappy with that arrangement.

The Department of Transportation has already tried to help. In 2011, regulators issued a final rule requiring, among other things, that certain U.S. and foreign airlines disclose information about optional service fees on their websites. But the rule didn’t end the confusion over fees — airlines found new ways to obfuscate their real prices with additional fees and surcharges. As a result, the DOT has been considering a new one that would require airlines to display their fares and fees through all booking channels.

Advocates say that legislation is being drafted that would make airlines disclose their fees no matter how a ticket is booked. The airline industry opposes any requirements to share data in this way, complaining that such rules would effectively re-regulate the industry.

“The marketplace is working,” says Kathy Allen, a spokeswoman for Airlines for America, an airline industry trade group. “Carriers must be allowed to continue offering optional services in a manner that makes sense for both customers and the industry, without government interference.”

Others argue that government intervention is exactly what’s needed. “The future of fast, easy comparison-shopping for air travel is on the line,” says Kurt Ebenhoch, executive director of the Air Travel Fairness Coalition, a group funded by travel search sites.

That leaves air travelers in a difficult position.

There is no credible source, online or offline, for a comprehensive selection of airfares and fees, where you can easily compare prices and then book a ticket. Airlines don’t share all of that information, claiming it’s their right to disclose that information to whoever they choose. And they’re correct — it is completely legal, even if it’s customer-unfriendly.

Until someone invents technology to overcome this seemingly simple problem, or a solution is legislated, air travelers will have to go fare-shopping with a calculator in one hand. The airline industry is hardly alone in making their customers run the numbers carefully, as University of Richmond transportation economist George Hoffer notes.

“You make your best deal on a car, and in the paperwork process, they spring on you a processing fee,” he says. “The sign was discreetly posted, but innocuous. You get mad and feel taken.”

More and more passengers are reaching that get-mad-and-feel-taken phase. And in an industry in which competition has been squeezed out by mergers and bankruptcies, the only place they can turn for help seems to be their elected representatives.

24 thoughts on “As airline revenue from extra fees increases, so does consumer ire

  1. I also think there should also be a bag included in the fare, and for that reason I tend to prefer Southwest for my leisure travel. But the fees have been around so long at this point that they should not be a big surprise by now, even among relatively infrequent passengers. If people are really upset about the fees, then they need to vote with their wallets; it’s a lot more effective a message than telling opinion surveys how unhappy you are.

    To use Spirit as an example: Their fee-heavy structure might be a surprise your first trip, but there can be only so many first-time customers. Clearly they have an awful large customer base for which those fees aren’t so bad that they’ll take their business elsewhere. There’s obviously a market for this sort of fare structure; RyanAir has a similar model, and they have a commanding lead in the intra-European air travel market.

    1. We should at least end the tax subsidies for unbundling. Ancillary fees should be subject to federal tax just like the base fare.
      And screen bias should be addressed as well. The websites that show flights should have access to published fees just like they have access to publish fares, so that it is possible for them to support displaying flights by a customer’s actual expected cost, not just by a deceptive sticker price.

    2. No bag means cheaper fares. Learn to travel with less stuff or fly internationally where airfares have never been cheaper. Btw your very dodgy politicians allowed airline mergers

  2. Nothing prevents an on-line travel agency from discovering an airline’s fees and including them in their estimated price. I don’t need an airline’s permission to almost book a ticket and get the per bag fee, the seat reservation fee, etc., and neither does Expedia. The on-line sites could give unofficial but pretty accurate fee estimates for any ticket if they so desired. But they benefit from selling phoney low prices as much as the airlines themselves.

    Elliott.org posts executive contacts. You could post airline fees, too.

    1. That could be super useful- maybe even a chart with average fees per airline- two columns: solo experienced biz traveler, family of 4- then people can extrapolate from there

    2. Accuracy, complexity, and liability prevents on-line travel agencies from doing this.
      Air carriers do not publish their fees to the GDS systems that OTAs use, and they are also free to change many of their fees after purchase.
      Also, the fees for ULCC’s can vary by route and date and time of purchase, among other criteria (which they adjust all the time) making it very tricky to engineer a reliable independent estimate.
      The DOT proposed rule-making in 2014 which would have potentially addressed this issue by requiring carriers to publish their fees to all distribution channels, Of course that NPRM has since been abandoned.

    3. they usually disclose those with the “click here” buttons — the fact that their clients choose not to bother to rad them says more about the shopper

    4. Nothing prevents the passenger from checking the airline website to see if he/she has to bay a bag fee because of the class of ticket being purchased or because of the airline status one holds. Failing that ,one can telephone the airline and ask. But, I know, having to take on some responsibility is so hard for some people. They apparently expect everything be handed to them.
      “you could post airline fees, too” I believe every airline has a “fee section” where someone can look.

  3. What I find interesting about Airlines for America’s position is that while we don’t like it, we’re not preventing the airlines from charging for bags, etc. All we want is that this is disclosed as part of the purchase price for comparison purposes early on, not after the fact. They try to gloss over it.

    1. Why would you want it ( lumped in? ) as part of the purchase price ? – that then make’s it “hidden”, the exact thing you’re all complaining about. UA, AA, DL do not do this “after the fact”- the choice is yours in the buying stage on their websites. If people read the choices/menu when they choose a fare of several choices, (posted side by side), then there is no argument. That supposed “cheap” fare you’re paying on Southwest is not cheaper – if you compare their prices, they are higher in so many markets. They have already built in their bag fees and make it look like they’re not charging people.

      1. That is not what I said at all…what I want is to be able to make an informed decision when comparing–this includes all add ins that would help me make that decision…e.g. if SW charges $10 more in the fare than United, but United is going to charge me $25 for a bag, then SW is indeed less expensive if I decide to check a bag.

        (By the way, lumping in was the norm until the airlines figured out that they could make a ton of money by splitting out those things they did provide as part of the fare previously–this made it much easier to comparison shop).

        1. Well then you would simply have to go to individual websites for each airline ( which is a good thing ) and kind of chart it out for yourself on paper. Time consuming, yes but worth it for comparing one against the other. The websites that make it even more confusing to people are the (third-party) Priceline, Expedia, CheapTickets, Orbitz etc. websites. They never take responsibility for withholding important information nor do they give any recourse when things go wrong. Questions?, ….you will be given numerous (usually wrong) answers by low-level phone clerks who cannot think out of the box or simply lie to get you off the phone. Unfortunately, looking for “hidden gems” involves digging, searching, and sometimes in the dark.

    2. Many airlines have basically stopped checking bags for free; some years ago. Be an informed consumer. I also believe almost, if not all airlines do disclose this before the final button is pushed to order the ticket.

    1. The Airline Transparency Act was anything but transparent for the consumer. This would have allowed airlines to post ticket prices without showing any fees or taxes included. The passenger wanting to book a flight would be even more surprised when the final total would be shown and seeing the total price greatly inflated over what was advertised. Not sure how this helps the consumer if it would have become the rule.

    2. Don’t be fooled by the name. One might reasonably think that “transparency” means “making the total price transparent to the consumer.” It doesn’t. It means “making the amount of the total price that are taxes transparent to the consumer, so they’re complain about taxes on plane tickets.”

      The Act would have allowed airlines to go back to quoting just the ticket price, without the taxes and fees included. Definitely anti-consumer.

  4. ““I don’t know anyone who doesn’t fly without luggage.””

    Then she really doesn’t know many people. Last #s I saw, less than half of pax on domestic flights checked a bag.

    1. The point that is being made is that very few travelers travel without a bag. One many airlines, there is no charge for bringing one bag aboard and putting it in the overhead compartment. Of course, such a bag must meet size restrictions. On Ultra Low Cost Carriers such as Sprint, Allegiant and Frontier, there is a charge for bringing a bag aboard. That charge can be greater than the cost of checking a bag.

      1. Of course many travelers do carry a carryon and some of those, when properly packed, can contain enough of what is needed for a several day trip.

  5. Love the last sentence! The days of elected representatives paying attention to their constituents are over, unless the constituents have boatloads of money.

  6. How and where are consumers missing this information (bag and change fees) ?? Airlines are definitely posting all bag and change fee restrictions based on the fare that persons are clicking off (before purchase). DL, AA and UA have easy to read (side by side comparison) charts based on the fare you choose. What do they want, a personal phone call from the airline to hold their hand and reassure them that they may or may not have read the restrictions. I don’t know about you but I READ THE MENU when I’m choosing a meal in a restaurant. Same thing.

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