Are airline fees being fairly disclosed?

Air travel is full of surprises, some good, many not.

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Steven Allen says he got a bad one recently when he called to change a United Airlines ticket from San Francisco to Puerto Vallarta, Mexico. To move his return date from Oct. 25 to Oct. 27, the airline wanted him to pay another $300, nearly half the $686 airfare.

Allen, a college instructor in Berkeley, Calif., who like a lot of leisure travelers isn’t fully aware of all the fees that airlines now impose on passengers, says that the surcharge was unreasonable. “It’s disappointing,” he said.

Other passengers are also frustrated by airline fees — specifically, by the fact that fees are often poorly disclosed until it’s time to pay them. (United’s Web site indicates that a fee “may apply” for ticket changes, but it offers no details.)

The domestic airline industry as a whole is in the process of re-imagining its business model, moving away from one in which the price of a ticket covers the basic cost of air transportation to one in which optional fees account for much of its profits.

A new survey underscores air travelers’ dissatisfaction with the change. The poll, conducted by Harris Interactive on behalf of Open Allies for Airfare Transparency, a coalition of online travel agencies and electronic travel distribution companies, suggests that many air travelers are clueless about fees. It found that 94 percent of Americans who’d recently used an online travel company to book their travel said that all airline fee information should be available to travel agents and online travel Web sites, which isn’t the case now.

David Kelly, Open Allies’ executive director, called the results a “wake-up call” and said they prove that passengers want to know exactly what they’ll have to pay before they open their wallets. “The survey data demonstrates that consumers expect airlines to share fees in a transparent and purchasable format in all the channels where they sell their fares,” he added.

Open Allies didn’t order up the survey because it’s opposed to fees. On the contrary, it’s pushing the government to force airlines to disclose fees so that its members can sell the optional extras, sharing in the air carriers’ windfall.

Airlines say that the current rules are sufficient. Transportation Department regulations that took effect earlier this year require air carriers to prominently disclose all optional surcharges on their Web sites and to include any mandatory fees and taxes in quoted fares. “United’s fees are clearly disclosed online, in accordance with federal regulations,” says Charles Hobart, a United spokesman. He adds that United also discloses ticket change fees in the individual reservation, because those fees can vary.

It isn’t just ticket-change fees that irk travelers. Legacy airlines have added a variety of charges, for extras such as the first checked bag and seat reservations. Some discount carriers are more aggressive, charging fees for carry-on bags and for the “convenience” of booking through their Web sites.

Together, those fees generated more than $10 billion for the airline industry worldwide in 2011, according to a recent study by the airline consultancy firm IdeaWorks. For many airlines, the fees made the difference between a profit and a loss, and in a few instances, they might have made the difference between survival and liquidation.

But at what cost? “From the passenger’s perspective, the price of that $10-plus billion is the truth,” says Charles Leocha, president of the Consumer Travel Alliance and the consumer representative to the DOT’s Advisory Committee for Aviation Consumer Protection. “Somewhere during the booking process, the passengers weren’t told the full cost of air travel.” (Disclosure: I co-founded the Consumer Travel Alliance and serve as its volunteer ombudsman.)

It’s easy to mislead customers, even when you’re complying with government regulations. Airlines do it by not including all charges in the price of a ticket, making the fare seem less than it is. And history lends a hand. Traditionally, making a seat reservation, paying for a ticket by credit card or printing a boarding pass at the airport has been included in the fare price. But now, the airlines have quietly “unbundled” those services while doing little or nothing to inform the public that tickets now don’t include them.

Leocha says that regulators are struggling with how to address what he sees as unfair and deceptive pricing practices. Strictly speaking, the fees now being charged by airlines are completely legal, and their disclosure meets all government standards. Yet many passengers still feel duped when they unexpectedly have to pay extra for something while they’re flying. More than half of the passengers surveyed by Harris said that they’re still being surprised by fees after they buy their airline tickets.

The problem is simple: In deciding to shift to a fee-based system for airline tickets, airlines did their homework, making sure that every step they took was legal, though not necessarily transparent.

The solution won’t be so easy. It will take creative regulations or new legislation to overcome misleading airline ticket prices. And both of those routes mean that consumers won’t see solutions for more than a year.

But a little pressure from the flying public could bring a fix closer. That’s what happened to Allen when he was faced with the change fee from United. He sent a polite e-mail to the airline’s director of customer care and copied me, explaining that he thought the charge was absurd. “Surely,” he wrote, “you can’t believe that anyone who has been charged such a fee would ever fly with United again.”

To his surprise, he received a call a few days later. A United representative reiterated the company’s position that the fee was correct but then added that, as a goodwill gesture, it would waive it.

That decision, as I noted a few days ago on my customer-service blog, gives me hope that airlines will see that fees — and the way they’re being charged — are not an effective long-term business model. And it makes me think that airlines can find a smarter way of making money long before any government action is taken.

47 thoughts on “Are airline fees being fairly disclosed?

  1. Wow. Surprising that United waived the fee. But to be fair, we need to know what part of that $300 was a change fee and what part was a difference in airfare, and also how far ahead he called to change. In all my years of traveling the world, I think I’ve had to change a ticket date a total of one time. I think it’s hard to nail down the actual value as it’s not as straightforward as a simple change fee. It’s also whether the original ticket can be sold so I think airlines are taking advantage of that and charging the maximum that the market will bear… (ie. just slightly less than buying a whole new ticket.)

  2. Who does not know that the standard change fee of United is $150?
    So if you want to change you will pay that plus any difference in the fare.

    1. The only problem is now when you search for change fees on the United web site, it just tells you this:

      “The cost to change your flight depends on the type of ticket you have purchased and the type of change you need to make. Enter your confirmation number and last name in the space provided at the bottom of this Web page. Then select the Change Flights option. You will have the opportunity to review all related costs before finalizing your changes.”

      Not very transparent, is it?

      1. The web site isn’t very clear because the rules do vary by ticket. But it’s pretty clear when you buy the ticket as to what rules apply to that ticket. I buy a discount economy ticket on United almost every week and on the page where I enter my payment info, it gives the following message below the flight info and above the payment info :


          1. I understand it perfectly. But then I’m a computer programmer who thinks assembler language is wordy. 😉

          2. Those words are intended for airline employees since what we are reading is the ENDORSEMENT line of the ticket.

          3. You see that word *grin* at the end? That means not to take that part seriously. But in response to your post, that is fine if they were publishing that on a system used by airline employees. But when it is on a system for the general public to use, they need to use non-airline speak.

          4. I was referring to what was reported as being on the website as emanon256 originally posted about. Not what is printed on the ticket. What they put on the website needs to be in plain language.

          5. What both Emanon256 and Mark are talking about are the ENDORSEMENT restrictions that appear on the fare rules.
            People need to understand that these are CODES that must be printed on the ticket and what you see in the website is nothing but an IMAGE of the ticket.

            If you want to read more, you must display the fare rules.
            No airline will TRANSLATE the fare rules into “plainer” language because for them [the airlines] what they write in the rules (tariff) is plain enough 🙂

            Here is the latest from UA …


        1. Yes, I used to see that on my United tickets.

          Just bought one. This is all it says on the receipt now:

          Fare Rules:Additional charges may apply for changes in addition to any fare rules listed.

          Cancel reservations before the scheduled departure time or TICKET HAS NO VALUE

          1. I distinctly remember seeing it at booking, but have probably started ignoring it over the years and didn’t notice that change, sorry about that. I admit I just pulled up a random ticket from my directory of hundreds of them, and cut and pate.

            Yet another reason the new United sucks. I really thought the old message was very clear.

          2. The new United always seems to be coming up with new ways to try to confuse the customer. And the new wording gives them more options to charge whatever they feel like that day. 😉

      2. There usually is a button or link that displays the fare rules. If people want to read all they need to do is click the button.

        1. I just went through and it says what Mark said, but there is a link by baggage fees that says,”View Rules and Restrictions” which brings up the fare rules. Under changes it says:


          It is much more hidden now.

          1. Actually, penalties is only one category of rules and restrictions. A customer primarily needs to know is he is buying a RESTRICTED ticket. Then, if he wants to know the restrictions then he needs to read the rules. Since the tariff rules are long, it is not convenient to print all the gory details each time one buys a ticket.That said most airlines provide a link to the Fare Rules before one buys a ticket.

  3. Well, I’m going to sound like a broken record, but the only way to fix this situation is to address the underlying root cause. As it’s being pointed out, it’s all about the revenue. The decision to charge these ridiculous fees is driven by a very simple reason, it brings in money.

    It is, therefore, a very simple logical process to conclude that the only way to change this, is to have the change also driven by revenue. If the airlines conclude that more people are turning to alternatives to flying because of these fees, and because they do not wish to be harassed by minimum-wage (and now unionized) goons with a badge, or have their guts fried by a pornozapper, when they go to the airport, then things will change.

    You can hope all you want for more government and consumer regulations, but it will never happen, or amount to anything. Only a revenue squeeze, from more and more people making a conscious decision to travel by other means, when they can, and making it clear to the airlines what they’re doing, and why, will result in any change, here. The airlines are doing that because it’s making money for them. If they conclude that it’s now costing them money, then they’ll stop. Otherwise, I see no reason for them to do anything.

    I am doing my part. I’ve already completed two business trips where I drove instead of flying, as I’ve done before. With a distance of around 350 miles, I found that flying only saved me 1-2 hours at the most, compared to driving. So I drove. My next trip is already scheduled for next year, and I’ll be driving again. It’s a far more comfortable, civilized experience, compared to the zoo at the airport, followed by an hour and a half stuffed into a pressurized sardine can, elbow to knee with others around me, and then waiting at the carousel, wondering whether my bag will arrive, and in what condition.

    I might have a longer trip later down the road next year, where flying might not be avoidable; but Amtrak can also get me there too, and I’m seriously considering an overnight trip on the rails, despite the ridiculous time that’ll take, just to avoid the madness that commercial flying is, these days.

    1. That brings up a good point, Are their hoards of consumers refusing to fly? If the airlines are making money from these fees, and in many case determine whether the airline is profitable, it seems improbable that the airlines are likely to conclude that people are so tired of fees that statistically significant numbers are choosing alternative transportation.

      1. “that statistically significant numbers are choosing alternative transportation”

        There in lies the problem. There are no real viable alternative transportation available for some trips. You going to try driving or taking a train to Europe? The airlines know most people don’t have a choice and so they can basically do what they want and the people are powerless to stop them.

        1. Therein lies the problem. For a dedicated/pissed off few, foregoing flying is worth it. I suspect that most people are unwilling or unable to take alternative transportation.

          For example, I had to fly to LA for a court case from the Bay area. Its only a five hour drive but court was at 10am. My options…

          Choice 1: Wake up at 3am, be on the road for 4:00am , appear in court, then return.

          Choice 2: Drive the day before, probably lose work time unless I want to get into LA at midnight, and spend the night in a $200+ hotel, drive home, effectively killing day two.

          Choice 3: Fly to LA that morning, go to court, return home by 2, continue with my day.

          The non-flight options of #1 (misery) or # 2 (expensive and time consuming) are suboptimal at best. And with gas at $4.00/gallon in California, driving long distances gets expensive.

          1. Hey. You forgot Choice 4. Take Amtrak from San Jose to LA. Pay twice as much for the ticket than the cost of a plane flight and take twice the time it would take to drive. *grin*

            Or even Choice 5. Grab a Greyhound bus. Cheaper than plane or driving, but…. Well, if you have ever ridden a Greyhound, I don’t need to say more. 🙂

  4. If you want to be your own travel agent, then you must assume the responsibilities.

    “In the day” when air travel was less common and the internet did not exist, live local travel agents told you orally all the terms and conditions of your ticket. Most still do. So if you are what Chris describes as “like a lot of leisure travelers…(not) fully aware of all the fees that airlines now impose on passengers” then you had best call a live, in-person local travel agent. You will get the full story from an expert. You pay for expert advice.

    If, however, you decide to assume the responsibilities of a travel agent, no matter the reason, then you must live with the accompanying responsibilities. That includes reading all warnings, asterisk notes, contracts of carriage and fare limitations. Those are the rules.

    The government requires these contracts of carriage. Other rules for restrictive fares are responsive to competitive pressures. You have the choice to buy an unrestricted Y or F fare, but few do. Everyone wants a deal. With a deal comes restrictions.

    Airline contracts, rules, fares, terms and conditions are fairly explained if you take on the responsibility of a travel agent. They are disclosed on line. Read them like the agents do.

    The option, of course, is “Big Government” sticking its big nose into the airline industry, re-regulating it again, specifying all fares and terms. Then everything becomes simple again. And noncompetitive.

    1. And very expensive.

      I do most of my own travel arranging. But then I don’t do anything very complicated. If I am taking a “vacation of a lifetime!”, I will use and have used a travel agent. My only problem is finding a travel agent since the internet and direct bookings with the travel companies have put most of them out of business.

    2. true. I do not expect airlines to be fair at all when i am dealing with websites. I had to cancel a trip recently that cost $800. Virgin was willing to credit me 650 and i was glad to take it. I fully expected them to say “sorry, no refunds”.

      The OP acted a little spoiled in my opinion; ticket prices are different on different days of the week, so for a price difference, plus a change fee- 300 sounds about right.

    3. Maybe I’m not reading this case correct;y, but I can’t find the passage that states the OP didn’t know about these fees; just that he was disappointed by them and thought they were absurd. Both reasonable reactions, in my opinion.

      1. Some of us respond to the poll question, in this case, “Are airline fees being fairly disclosed?”

        Yes, the flyer was disappointed with airline fees. I am disappointed DeBeers has a monopoly, and I think it’s absurd they charge so much for diamonds. So what? You buy the ticket; you abide by the contract. Otherwise, go for anarchy, no rules or only those which do not disappoint us. LOL.

  5. do not forget all of the levels of taxes on tix fares also that is mindboggling…and lately when booking united i do not get a confirmation email till the next day making it more concerning that cahnges can happen to the fare etc and it is too late to do anything about it >?? what gives

  6. Personally, I feel it’s not the disclose of the fee, but the absurd amount of the fee. You can’t tell me it costs them $150 to make a reservation change. Between the airlines cramming more seats into the plane and resulting in the type of situation talked about the other day on here, and the TSA abuse of travelers, I have given up on flying. Voting with my wallet.

      1. I’m not defending the airlines in any way (nor did I downvote you!) but say the OP changed his ticket two days out. It’s fair that he pays the fare difference. But if there’s not enough time to sell his original seat, then that’s a cost to the airline. So I think they’re building some extra padding into the change fee; it’s not simply for the administrative act of changing the ticket. But I’m sure they’re making a ton of money off it. I’d love to see the algorithm that predicts how much is actually lost due to a change vs. what they rake in with the across the board USD 150 fee…

        1. Rereading my post I guess I really wasn’t clear on my meaning. I was referring to the fees in general, not specifically the fee charged to the OP. It was in response to the poll question and not the story.

  7. So unusual for United to waive the fee. Wonder if he would have gotten the waiver if Chris’s name wasn’t copied in on the message.

  8. The way united change there change policy during the merger really annoys me. Before the $150 domestic change fee was part of the equation, now its in addition to the equation.

    For example, whenever I used to have to change a flight, I would just push it out really far. I usually book 3 weeks out, so my tickets would be around $500. If I couldn’t fly next week, I would change it to a flight 4 weeks out, which would be around $400. If it was $400, my $500 credit, minus the $150 change fee, meant I only paid $50 total to change. Under their new rules, the $150 change fee is a separate fee, in addition to any fare difference, so under the same scenario, I have to pay a $150 change fee, and then they give me a voucher for the $100 fare difference, if the new flight is more, I can apply the difference to it, but not if its less.

    This change immediately happened when they converted into the CO system, and no notice or explanation of the policy change was given. When I first asked about it, I was talking to an ex co agent who said that was always the policy. When I asked another time with an ex-original-UA agent at the airport, she said it was an un-expected change that caught everyone off guard.

    Even though this change annoys me, I still choose to fly because its much faster and more convenient than driving close to 4,000 mile a week. It’s just a cost of doing business.

  9. The government clearly isn’t going to do anything about this any time soon, and because people are forced to fly places to get there quickly, airlines are going to behave unethically by not disclosing what they are not forced to disclose by law. So consumers feel trapped. The only way to get rid of those fees is to avoid air travel altogether, which in many cases just isn’t possible.

  10. This is absolutely ridiculous. People’s preference not to pay fees and lack of interest in understabding what they are buying is being confused with misleading practice by the seller. I do believe airlines should have to disclose their fees; I’ve yet to see a recent case where they didn’t. The airlines’ only obligation is to DISCLOSE, not to ensure customers comprehend.

    1. People need to understand that airlines DISCLOSE the change fees and rules in the Fare Rules (or tariff). All people have to do is read them.

      1. IMHO, Chris is doing a disservice with this article. He should consult with a TA BEFORE posting an article on fares so he is providing correct information.
        When you make a change to a ticket, not only will there be change fees, but if the fare has changed, or the class of service isn’t available that you were orignailly booked in, there usually is a fare increase (add collect it is called in the industry). EVERY fare you book has rules and it is ALWAY availabel BEFORE you make the purchase. It is just that nobody thinks they need to read those rules.
        I see nothing unusual about the added cost on the change.

  11. Steve Allen was the $300 just the change fee or was there a difference in fare ?
    You didn’t mention what made up the $300 !!!
    It just shows how stupid people are. They demand cheap fares, but when airlines provide them, they complain about the unbundled extras.
    Can’t have it both ways !!!

    1. I would agree with you if I felt that the fess were actually previously bundled into the fares. But, I suspect that these new fees are actually ADDED to the fare, much like the old (still around?) fuel surcharge; when the gas prices went down the fee remained.

  12. even read a fare sheet put out by airlines ?
    They’re written by lawyers with a poor grasp of english language (maybe on purpose)
    Printout out an e-ticket the other day & in total 6 x A4 pages of microprint.
    Don’t like it in microprint, then in 10 point it would probably be a dozen pages.
    Be careful what you wish for.

  13. Change fees are easy to avoid by paying more. The problem is that leisure travelers don’t want to do that.

    Even with fees, air travel is still a relative bargain. Mr. Allen could have driven to Puerto Vallarta. One site I checked estimates the cost for gas each way (for a Honda Accord) to be $221.85. It also would take 33 hours each way. Add in the cost for food, lodging, and auto wear/tear, and possible special insurance for driving into Mexico, and he’s still better off even after paying a change fee.
    Note: The average pricing between SFO and Puerto Vallarta is about $450. So, it’s likely that $300 included a price increase due to limited seats over a higher demand period.

  14. US Airways wanted me to pay $150 to cancel the outward leg of a flight that I missed, even though I was going to have to buy another ticket to get to where I wanted to go. Luckily I remembered that I had bought the ticket less than 24 hours earlier, and our travel agent allowed me to cancel the whole thing. I ended up not using US Airways at all, thanks to their greed since I was prepared to forgo the cost of the outward flight and buy a new ticket – but not to pay twice.

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