Sneaky fees that bump up airlines' revenues could be grounded if new legislation proposed by two Senate Democrats is approved.
The Forbidding Airlines from Imposing Ridiculous (FAIR) Fees Act and the Airline Passengers’ Bill of Rights aim at axing fees such as checked bags and seating assignments, as well as introducing a fair compensation scheme for impacted customers.
The bills from Sens. Richard Blumenthal of Connecticut and Edward Markey of Massachusetts come after weeks of chaos on the tarmac. In early January, thousands of domestic flights were cancelled after an antiquated computer system used to generate alerts called NOTAMs — or Notice to Air Missions – broke. Airports in Chicago, Los Angeles, New York and Atlanta saw between 30% and 40% of flights delayed.
This winter has been the worst on record for cancelled flights in the U.S., according to the Financial Times, with more than 10,000 flights cancelled due variously to the technical problems and storms.
Huge money maker
The FAIR Fees Act would be a direct hit to a billion-dollar money maker for airlines. In 2019, U.S. domestic airlines collected $5.8 billion in baggage and $2.8 billion in ticket reservation fees alone. According to Forbes, baggage alone was worth $28.1 billion worldwide in 2018.
Research from Upgraded Points, a market research firm, also found that travelers on lower-budget airlines are paying more on average for their bags. On top of that, carriers with a basic economy option also place higher on the list of average check-in fees.
The bill would also take aim at charges which can be imposed on parents who are trying to ensure they can sit with their children, as well as calling on the Department for Transport (DOT) to review any other additional charges lumped on by airline providers.
Sen. Markey said it was “no secret" that airlines were "pinching passengers’ pocketbooks with ridiculous fees—from charging travelers extra for a carry-on bag to forcing parents to pay to sit with their children—at the same time that they’re leaving their passengers stranded. It’s unacceptable."
Do you get compensation for flight delays?
The changes wouldn't stop there. The legislation — which is co-sponsored by Sens. Sheldon Whitehouse, D-R.I., Bob Casey, D-Pa., Ron Wyden, D-Ore., and Bernie Sanders, I-Vt. — also requires airlines to pay at least $1,350 to passengers denied boarding as a result of an oversold flight, and mandates airlines to immediately refund bag fees for damaged or lost bags.
The impact of such a bill would result in increases to ticket prices and cuts to services, according to the industry group Airlines for America (A4A). Its members, many of which are the largest carriers in the States, would see "decreased competition" it claimed. An A4A spokesperson told CNBC that, “The proposed policies in this bill — instituting government-controlled pricing, establishing a private right of action and dictating private sector contracts — would drastically decrease competition, leading to a subsequent increase in airfare prices and potential cut in services to small and rural communities."
Currently there is no obligation for airlines to return any cash to customers if their flight is delayed. DOT material outlines that there are no federal laws to provide passengers with money or other compensation — even a hotel room or meals for those who have been stranded by an airline.
DOT added a "significant delay" still does not give customers any guarantees, and added it does not have a framework to define what "significant" entails. "Whether you are entitled to a refund depends on a lot of factors — such as the length of the delay, the length of the flight, and your particular circumstances. DOT determines whether you are entitled to a refund on a case by case basis," it adds.
William J. McGee, senior fellow for aviation and travel at the American Economic Liberties Project, said: “Despite the airlines' dismal performance over the past year, they continue to nickel-and-dime passengers with higher and higher junk fees.
“We applaud Senators Markey and Blumenthal and Congressmen Cohen and Garcia for continuing the fight against unreasonable and often opaque fees that deceptively drive up the price of airline travel. And many fees should have been eliminated long ago, such as forcing families with young kids to pay extra to sit together."
Airlines for America did not immediately respond when approached by Fortune for comment.
