Budget airlines Frontier (ULCC) and Spirit (SAVE) have recently landed in some hot water.
For the past few years, President Joe Biden’s administration has been dead set on cracking down on “junk fees” that many companies nationwide have enforced, adding extra strain on consumers’ wallets.
😲Don’t Miss this amazing Black Friday Move! Get 60% off TheStreet Pro. Act now before it’s gone. 🚨
One area of focus the Biden administration has been fixated on is the airline industry, which is famous for tacking on extra service fees. According to a recent report from a U.S. Senate subcommittee, airlines have made roughly $12.4 billion from seat selection fees alone.
Related: American Airlines letter goes viral for shocking flight attendant salary
The report also revealed that Frontier and Spirit even incentivized their workers to charge customers extra fees for bags and seats.
"Frontier and Spirit paid $26 million to gate agents and other personnel between 2022 and 2023 to catch passengers allegedly not following airline bag policies, often forcing those passengers to pay a bag fee or miss their flight," reads the report.
How Frontier and Spirit employees get paid from these fees
Spirit’s program, launched in November 2022, allowed its employees to earn a $5 commission for charging customers for oversized carry-on bags. They also earned $4 for charging for overweight checked bags, $2 for selling exit row seats, and $5 for selling Big Front Seats.
Related: Frontier vs. Spirit: Which budget airline is better?
“Spirit personnel are eligible to receive these incentives on a monthly basis; there is no limit to the amount gate agents can collect in a given month, but agents are not eligible if ‘Guest experience ratings’ decline,” reads the report. “Spirit also has an ‘Airport Leadership Incentive’ that rewards managerial personnel if a particular airport exceeds a ‘revenue per guest metric’ in a given month.”
For domestic flights, Frontier’s incentive program, which began in March 2022, allowed customer service agents to earn $10 for each carry-on bag purchased at the departure gate or online within 60 minutes of the departure time of a passenger’s flight.
Agents also earned $3 for carry-on bags purchased at the airport ticket counter and $3 for selling seats with extra legroom.
More Travel:
- Delta customers detail ‘disastrous’ CrowdStrike chaos in lawsuit
- Paris is becoming an Olympic-sized nightmare for locals
- Disney flags startling shift in consumer behavior at theme parks
“Both Spirit and Frontier allow passengers to bring a ‘personal item’ on board for free, but charge passengers a carry-on bag fee if the personal item is deemed to exceed the permitted size for personal items, a process that occurs after the passenger has arrived at the airport,” reads the report.
Senate report warns these incentives could lead to abuse
Frontier went viral on TikTok last year for its strict bag policy. Some customers claimed that gate agents would conclude that their personal item did not fit within containers that were meant to measure the size of the bag to ensure it adhered to Frontier’s policy, even though the items visibly did fit.
View the original article to see embedded media.
“Frontier paid carry-on bag commissions for 18 months before changing the ‘goal of the program’ to include limiting passenger complaints,” reads the report.
The report also notes that “incentive payments paid by Frontier and Spirit to gate agents and other frontline personnel to enforce the airlines’ bag policies may inappropriately encourage abuse of discretion when it comes to deciding whether a passenger’s personal item meets the requirements of each airline’s policy.”
Related: Boeing delivers hard-nosed message to workers
According to the report, both airlines have denied that their incentive policies are being abused.
The Senate report comes after Spirit filed for Chapter 11 bankruptcy last month after its alleged plan to merge with Frontier Airlines fell through.
Spirit had formerly planned to merge with JetBlue, as announced in 2022. However, the agreement was terminated in March after a federal judge in Boston ruled that the proposal violated antitrust law.
Spirit has lost more than $2.5 billion since the 2020 Covid pandemic, and it faces debt payments totaling above $1 billion in 2025.
Related: Veteran fund manager sees world of pain coming for stocks
